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Construction Industry Forecast Report 2026 - 2028

South Africa's economy is expected to remain on a path of gradual recovery over the medium term, although growth is likely to remain below the level required to meaningfully reduce unemployment or accelerate infrastructure delivery. Real GDP is forecast to increase modestly between 2026 and 2028 as inflation gradually moderates, interest rates begin easing and household spending, exports and fixed investment improve. However, the recovery is expected to remain constrained by elevated borrowing costs during 2026, ongoing fiscal pressures, weak municipal capacity and the slow implementation of infrastructure projects. While global conditions are expected to become more supportive as oil prices and inflation normalise, South Africa's growth trajectory will continue to depend largely on the pace of domestic structural reforms and project execution.

The construction industry is expected to recover more slowly than the broader economy. Although the construction pipeline is forecast to strengthen over the forecast period, historical analysis indicates that improvements in project planning and tender activity typically take 18 to 24 months to translate into construction turnover and fixed investment. Residential building is expected to remain under pressure during 2026 as high borrowing costs continue to constrain housing demand, while non-residential building should remain relatively stable, supported by industrial, logistics, healthcare, tourism and private energy developments. Civil engineering offers the strongest long-term growth potential, driven by electricity transmission, water infrastructure, transport and mining investment, although procurement delays and institutional capacity constraints are expected to temper the pace of recovery.

Overall, the outlook remains cautiously optimistic. South Africa possesses a substantial infrastructure pipeline and growing private-sector investment interest, particularly....

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