Nearly a quarter of SA’s workforce hold informal jobs

Stats SA has put the number of people employed in the informal economy at 4-million after definitions of formal and informal employment underwent “significant revisions” for the third quarter jobless rate.

The agency on Tuesday said, based on the revisions, “estimates on informality cannot be compared with the previous estimates”.

SA’s informal economy is said to be worth R900bn annually.

About 1.3-million people employed in the informal sector are women.

The size of SA’s informal economy has been a hot topic in the country after former Capitec CEO Gerrie Fourie said the sector was undercounted and actually accounted for a larger chunk of jobs.

Capitec, which banks 25-million people, has put the size of the informal economy at 6-million businesses.

According to the Quarterly Labour Force Survey, SA’s unemployment rate decreased 1.3 percentage points in the third quarter of the year to 31.9% with 17-million people employed, with nearly a quarter of this in the informal sector.

StatsSA said that while the revisions strengthened how certain aspects of the labour market were captured they did not affect the measurement or definition of employment and unemployment. Headline unemployment figures thus remain comparable and consistent with previous quarters, the agency said.

The entity identifies informal employment as people who are in “precarious employment situations, irrespective of whether or not the entity for which they work is in the formal or informal sector”.

“Persons in informal employment, therefore, comprise all persons in the informal sector, employees in the formal sector, and persons working in private households who are not entitled to or receive basic benefits such as pension or paid leave and sick leave,” it said.

The informal sector comprises entities that are not registered for VAT or income tax or registered with the Companies and Intellectual Property Commission.

A study by Standard Bank into the informal economy, released last month, found that 80% of businesses surveyed were unregistered — a striking number that might force the government to move fast to implement its plans to overhaul the country’s business licensing regime.

The report notes that businesses in the informal sector operate from residential residences or streets to minimise costs and are dominated by males in the age group 35-54, adding that township businesses have a complex relationship with banks.

To this end the businesses often use personal accounts for business due to “perceived high fees, inaccessibility of credit” and negative experiences.

StatsSA has dismissed Fourie’s suggestion that the actual unemployment rate, which Stats SA reports at 32.9%, may be closer to 10%, based on observations of informal economic activity.

Stats SA dismissed his views as unscientific. However, the comments forced a meeting between Fourie, Stats SA, the presidency and the Treasury, with the parties agreeing on a need to establish a register for informal enterprises.

The largest increases in employment in the quarter under review were recorded in the construction industry (130,000), followed by the community and social services (116,000) and trade (108,000) sectors.

Industries that were hard hit, however, were manufacturing (62,000), followed by finance (54,000), utilities (30,000) and transport (3,000).

In a media briefing on Tuesday to announce the results of the quarterly labour force survey (QLFS) for the third quarter of 2025, statistician-general Risenga Maluleke said there was a decrease of 360,000 in the number of unemployed people to 8-million: “Consequently, the labour force decreased by 112,000 (0.4%) between the second and third quarters of 2025.”

Statistician-general Risenga Maluleke. (SIYABULELA DUDA)

Stats SA has changed the name of the “Not Economically Active” population to “Outside the Labour Force” with additional terms on “Potential labour force”.

“Between the second and third quarters of 2025, the number of people outside the labour force rose by 239,000 (1.4%), driven by an increase of 230,000 in the potential labour force and an increase of 8,000 among others outside the labour force,” Maluleke said.

“Within the potential labour force, the number of discouraged job-seekers grew by 36,000 (1%), while those in the potential labour force for reasons other than discouragement increased by 130,000 (15.5%), and those that were not available but seeking increased by 64,000, resulting in a total net increase of 230,000 in the potential labour force.”

According to the data, the number of employed people increased in eight provinces between the second and third quarters, with the largest employment gains recorded in the Western Cape (70,000), KwaZulu-Natal (54,000), Gauteng (51,000), North West (42,000) and Limpopo (40,000).

Employment loss was only recorded in the Eastern Cape (53,000) during that period.

The survey showed there were about 10.3-million young people aged 15–24 years in the third quarter of 2025, of which 33.9% were not in employment, nor in education or training.

Cosatu parliamentary co-ordinator Matthew Parks said the labour federation welcomed the “positive drop in unemployment” and the increase in employment was good news.

“It is crucial that this critical momentum is maintained and in fact accelerated as we head into the festive season of quarter four where there is normally a spike in employment as the retail and hospitality sectors cater for millions of workers and their families’ end-of-year festivities. SA is long overdue for some good news,” Parks said.

Unemployment was the single greatest threat to the nation. “Tackling it must be our collective focus and every possible resource and intervention mobilised to defeat it,” he said.

“South Africans do not expect overnight miracles, but we need to see consistent and steady progress, such as a fall of unemployment by 1% each quarter. This will provide the momentum the economy needs and give hope to the working class and society.”