The Q3 2025 Afrimat Construction Index (ACI) registered a double-digit, quarter-on-quarter increase, representing a significant improvement compared to Q2 2025’s results.

The composite index of activity levels in SA’s building and construction sectors is compiled by economist Dr Roelf Botha, who says that the most impressive aspect of the latest ACI is that the downward trend of the four-quarter average has been arrested, with a marginal uptick recorded.

“The majority of indicators recorded double-digit growth rates, whilst the volume of building materials produced enjoyed the second highest year-on-year increase and the third highest quarter-on-quarter increase,” he says, adding that a further decline of 25 basis points in the prime overdraft rate during the period also played a role in the improvement of several indicators, especially in the values of building plans passed and retail trade sales of hardware.

Construction sector activity outperformed GDP by a healthy margin during the quarter, although it lagged overall economic activity compared to Q3 2024.

He says it is encouraging that only one of the 10 indicators failed to record quarter-on-quarter growth, namely the value of construction works (in real terms).

“The lack of progress with capital formation in the economy, which is generally associated with a significant element of construction works, should be of concern to the Government, as the country is in dire need of repairs and expansion of infrastructure, especially roads, water, and sewage.”

He adds that it was, however, worth noting that SA’s economic growth prospects have improved lately, mainly due to the lower interest rates and a large measure of fiscal stability. “The latter has been boosted by the performance of gold and platinum prices, which played a key role in securing a healthy cumulative trade surplus during the first ten months of the year.”

Looking ahead, Dr Botha expects a further recovery in construction sector activity, especially due to the latest decrease in the prime overdraft rate to 10.25%.

“Although the modest relaxation of monetary policy is to be welcomed, more interest rate cuts are required to bring the cost of capital in SA in line with our key trading partners.”