South Africa’s cement manufacturers are preparing for a potential rebound in demand next year, buoyed by emerging signs of renewed activity in private-sector construction and a strengthening pipeline of public infrastructure projects. After years of subdued performance, driven by oversupply, weak investment and competition from imports, producers are seeing tentative evidence that the sector may have reached its nadir. This cautious optimism stems from a combination of government initiatives and improving economic indicators that could gradually lift cement consumption.
Recent data from civil tenders highlight a mixed but encouraging picture. Tender values declined 15 per cent year on year to R6.3 billion in October 2025, reflecting softer activity in provinces such as Mpumalanga. However, large project awards rose sharply by 56 per cent to R10.4 billion, supported by significant contracts from SANRAL, Rand Water and Eskom. These developments indicate that key public entities continue to advance strategic infrastructure despite broader challenges, providing a foundation for sustained demand in cement-heavy applications like roads, water systems and power facilities.
South Africa’s construction sector appears to have bottomed out after a prolonged downturn, according to Roelof Botha, economic adviser to the Optimum Group. He noted that the value of manufactured mineral products, including cement and bricks, has outperformed overall manufacturing output in recent periods. This trend aligns with forecasts projecting the domestic cement market to expand at a compound annual growth rate of 2.5 per cent from 2025 to 2034, reaching approximately 17.14 million tonnes by the end of that decade, as reported by World Cement.
PPC, the country’s leading cement producer, has shown signs of renewed stability under its “Awaken the Giant” strategy, which delivered a 28 per cent increase in EBITDA to R1.59 billion and generated over R1 billion in free cash flow for the year to March. The company’s focus on cost discipline and operational efficiency positions it well to capitalise on any demand recovery. Meanwhile, heightened building activity in major metros such as Johannesburg, Cape Town and Durban is expected to drive further consumption, as concrete remains integral to urban development projects.
Road infrastructure represents another vital driver, with SANRAL’s ongoing investment in new builds and rehabilitation likely to sustain cement needs for road layers and stabilisation. Retail hardware sales have risen nearly 8 per cent in real terms year on year, while building plans approved by larger municipalities show a modest upward trajectory. These indicators, tracked in the Afrimat Construction Index, suggest improving conditions across the supply chain.
Additional momentum comes from monetary policy and fiscal measures. The recent reduction in the prime overdraft rate to 10.25 per cent has eased borrowing costs, though further cuts would be needed to align South Africa with key trading partners. National Treasury’s successful issuance of the Infrastructure and Development Finance Bond, raising R11.8 billion on 9 December, has allocated funds to priority projects, reinforcing government commitment to infrastructure delivery.
The FNB/BER Building Confidence Index points to cautious optimism for the building sector in 2026, with lower interest rates, anticipated economic growth and structural reforms potentially accelerating progress from a low base. While hurdles remain, including regulatory delays and import pressures, the combination of these factors offers cement producers a clearer path to recovery as South Africa’s construction landscape begins to stabilise and expand.