Data released by Stats SA on Tuesday showed formal sector employment starting this year on the back foot, with the country shedding 74,000 jobs in the first quarter.
According to Stats SA’s latest Quarterly Employment Statistics survey, employment in the non-agricultural sector contracted by 0.7% between December and March, shrinking the total number of jobs to 10,579,000.
Standard Bank head of SA macroeconomic research Elna Moolman said the survey showed a “reasonably weak labour market”, with lower government employment and broad-based declines in the private sector.
This was partly attributable to political and policy uncertainty globally as geopolitical tension and trade wars escalated, and domestically where budget delays and policy debates called into question the stability of SA’s coalition government.
While the situation hardly improved in the second quarter, some progress in the economy was expected in the second half of the year, which should be followed by a recovery in the labour market in due course, said Moolman.
The biggest job losses came from the trade (52,000), community services (17,000) and mining (4,000) sectors, while business services, construction and electricity shed another 1,000 workers each.
A slight improvement in the manufacturing sector did little to offset the decline with manufacturing jobs increasing by 2,000 from the previous quarter.
The figures come as SA’s official unemployment rate rose to 32.9% in the first quarter of 2025 from 31.9% in the fourth quarter of 2024.
Business Day reported the unemployment figure including those that have given up looking for work had risen to 43.1%.
The slight contraction was in line with expectations from Investec economist Lara Hodes, and reverses the gains made in the final quarter of last year, when SA added 12,000 jobs.
On an annual basis, total employment was down by 0.9% from March 2024.
A further concern is worker compensation, with “severe pressure” on bonus payments resulting in total income failing to keep pace with inflation, despite a relatively benign inflation environment during the period under review.
In terms of pay, a 4.6% quarter on quarter slip pushed gross earnings paid to employees below R1-trillion, from R1.3-trillion in December to R983.1bn in March 2025.
Decreases were recorded in community services, manufacturing, trade, construction, transport, electricity and mining, while business services reported an increase.
With six of the eight industries included in the survey posting fewer jobs than in December, Investec economist Lara Hodes said the outcome was indicative of a “lacklustre economy”.
“Economic growth rose marginally in the first quarter of the year as the economy continues to face a number of challenges, with business confidence weak, weighing on investment potential.
“While we have seen an increase in political and policy uncertainty following the passing of the Budget 3.0, the hastened implementation of reforms by government is imperative to lift sentiment, supporting a sustained increase in growth and job creation,” said Hodes.
Earlier in the year, the unemployment scourge prompted the government of national unity to adopt the medium-term development plan, which sets out a clear and ambitious programme for the next five years.
The figures come amid mounting calls for Stats SA to review the methodology by which it measures employment in the informal sector, in an ongoing debate sparked by Capitec CEO Gerrie Fourie.
He argued that SA’s high unemployment rate was inflated because activity in the informal market — which some economists estimate to be worth billions of rand annually — was not fully accounted for in Stats SA’s calculations.
Statistician-general Risenga Maluleke defended the department’s data on the informal economy, pointing out that it aligned with the requirements of the International Labour Organisation.
Update: June 24 2025
This story contains additional comment from economists.
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