Cape Town Economic Growth Resilient Amid Global Headwinds --EPIC Report
Cape Town’s regional economy expanded by 0.6% quarter-on-quarter in the first quarter of 2026, slightly outperforming South Africa’s national growth rate of 0.5%. Global economic turbulence and geopolitical tension in the Middle East disrupted international shipping and increased fuel cost pressures during the period.
In his foreword to the City’s latest Economic Performance Indicators for Cape Town (EPIC) report, Mayoral Committee Member for Economic Growth James Vos framed the macroeconomic backdrop: "Heightened conflict in the Middle East disrupted international trade and logistics networks, placed upward pressure on fuel costs and created uncertainty for businesses and consumers alike". Vos added that "Cape Town once again demonstrated the resilience that has become one of its defining characteristics".
A strong peak tourism season bolstered local activity across retail, hospitality, and transport. Establishments reported a 71.1% average occupancy rate, driven primarily by international travelers.
However, the local labour market experienced a decline of 32,709 jobs quarter-on-quarter, bringing total employment to 1.86 million and pushing the unemployment rate up to 21.4%. Job losses occurred primarily in community services and manufacturing, though construction added 13,524 jobs. Project Lead Jodie Posen noted that "losses, particularly in community, social and personal services, and manufacturing, overshadowed employment gains".
To counter industrial sector weakness, the City approved an enhanced Manufacturing Support Policy across 33 industrial areas. Vos highlighted the strategic rationale behind the policy: "Governments do not create jobs; businesses do. So, our responsibility is to remove unnecessary obstacles, provide practical support where appropriate and maintain an environment where enterprise can flourish". He noted that the African Continental Free Trade Area offers further export opportunities for local producers.