470% boost for one of South Africa’s most important industries
While mining production in South Africa declined in August, sales have increased dramatically over the last year amid a rise in commodity prices, especially gold.
Stats SA’s latest data showed that mining production dropped by 0.2% in August 2025 annually, while it also contracted by 1.2% month-on-month.
This came from a relatively strong July, when mining output rose by 5.1% y-o-y and 1.2% m-o-m.
The most significant negative contributors to the weaker August outcome were platinum group metals, gold and manganese ore, all dropping by around 3% annually.
However, the Bureau for Economic Research’s Katrien Smuts said that the story is more positive when considering total sales in current prices. Sales reflect the benefit of higher commodity prices.
“While very volatile on a month-to-month basis, it was remarkable that gold sales rose by 471% y-o-y and PGMs by 44%,” said Smuts.
“Commodity prices have continued to rise in September and October, which should support robust nominal growth over these months.”
Gold has seen remarkable growth amid global uncertainty, as investors and central banks target the limited resource.
Uncertainty has risen due to rising geopolitical tensions following the introduction of heavy US tariffs and the recent US government shutdown.
On top of rising geopolitical tensions, many investors are also factoring in aggressive rate-cut bets and the weakness of the US dollar.
While not at the same level as gold prices, PGM, of which South Africa has nearly 80% of the world’s supply, has risen dramatically following a troubling few years.
PGM’s rise in price has been linked to the production struggles in South Africa, which have been impacted by limited investment in new mines, high operating costs and a lack of mergers and acquisitions.
Despite the price rise for commodities, it will be a challenge for miners to increase their output.
“However, whether commodity price translates into volume growth remains uncertain, as it is often difficult to ramp up production on such short notice,” said Smuts.
Not the only mixed bag
Retail sales in South Africa also moderated in August relative to July 2025, declining by 1.2%.
Mining was not the only sector to see mixed results in August, with retail sales also moderating in August relative to July 2025, declining by 1.2%.
That said, retail sales on an annual basis were up by 2.3% year, even if this was slower than the 5.7% annual increase in July.
“Among the retailer types, all other retailers and hardware, paint, and glass outlets performed relatively well, contributing positively to overall growth,” said Smuts.
“In contrast, sales of food, beverages, and tobacco declined in August and detracted from total retail trade performance.”
Real wholesale trade increased by 1% monthly and 1.7% annually in August. Smuts noted that wholesale trade volumes have trended sideways for the past two years in real terms despite the improvement.
Motor trade sales have continued to perform well in August, rising steadily across 2025. Motor trade sales increased 0.5% monthly and 1.9% yearly in August 2025.
On a seasonally adjusted basis, new vehicle sales, used vehicle sales and income from fuel sales on a monthly basis.
That said, workshop income and two other categories contracted in August, which hurt the overall growth rate.
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