Since Q1 2025, the Afrimat Construction Index (ACI) has shown a strong rebound in several key indicators, including a 21.7% increase in the value of buildings completed, a 13% rise in the sales value of building materials, and a 10% growth in the volume of building materials produced.

Economist Dr. Roelof Botha, who compiles the index for Afrimat, explains that the ACI’s recovery followed a low base in the first quarter, with a slight decrease in the prime overdraft rate during Q2 2025 also contributing to the improvement.

Despite the impressive quarter-on-quarter increase in the ACI of 6.8% during Q2 2025 (more than double the GDP growth rate), it is a point of concern that the year-on-year change remained negative, he says.

“The impact on the residential property market of the recent lowering of the country’s benchmark lending rate has been reflected in the latter index increasing by 14% year-on-year during July and August. In the process, the number of home loan applications reached its highest level since the third quarter of 2022, when record high interest rates really started biting into the pockets of prospective homebuyers.”

Botha added that the residential property market is slowly but surely building up steam, which will ultimately benefit construction activity at large.

“The pace of further recovery in the construction sector will, however, only gain significant traction once the prime rate has returned to its level of 7% that existed immediately after the pandemic, and the Government takes real action on vital infrastructure projects.”