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Gross Fixed Capital Formation 1st Quarter 2025

South Africa’s Gross Fixed Capital Formation (GFCF) declined by 3.2 percent year-on-year in the first quarter of 2025, marking the sixth consecutive quarter of contraction. Private sector investment dropped by 4.7 percent, while government and public corporation investment remained largely flat or marginally positive exposing a widening gap between policy promises and real expenditure, especially in infrastructure. Construction investment fell across all major segments, with residential investment declining the most at 8.4 percent. Non-residential investment dropped by 2.4 percent, although a notable increase in approved plans—particularly in office and industrial space—offers a glimmer of future recovery. Civil construction works also declined by 2.4 percent year-on-year, impacted by a 45 percent drop in tender activity. While the informal construction labour market supported marginal year-on-year job growth, overall business confidence remained below the neutral 50-point mark, with civil contractors slightly more optimistic than their building counterparts. The share of fixed investment in GDP has dropped to 13.8 percent, levels last seen during the COVID-19 era, while the construction sector’s contribution to GDP has more than halved over the past decade, falling to just 2.3 percent.

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