Why South Africa’s Job Gains Are Too Weak to Boost the Struggling Economy

South Africa’s latest job figures reveal a worrying trend: while the decline in formal employment has slowed, the gains remain far too weak to make a dent in the country’s unemployment crisis. With economic growth stagnating and key industries like manufacturing shrinking, experts warn that without urgent reforms, the labor market will continue to lag.

A Bleak Picture for Formal Employment

According to Statistics South Africa (Stats SA), formal sector jobs (excluding agriculture) declined by 0.1% quarter-on-quarter in the last three months of 2024—a marginal improvement from the 1.2% drop in the previous quarter. However, year-on-year losses were steeper at 0.8%, highlighting persistent weakness in the job market.

Sectors like trade, transport, and business services saw some gains, but these were offset by declines in:
Manufacturing (down 15% over the past decade)
Mining (gross earnings fell 1.8%)
Construction
Community services (including government jobs)

Dr. Azar Jammine, chief economist at Econometrix, warns that deindustrialization is crippling job creation. “Manufacturing production has been declining for years, and without skilled workers, we can’t revive this critical sector,” he says.

Why Economic Growth Isn’t Translating into Jobs

South Africa’s economy grew by a meager 0.6% in 2024, far below the 3% target set by the government-business partnership. Lara Hodes, an economist at Investec, notes that the job losses in four out of eight surveyed industries reflect “a lackluster economy struggling to gain momentum.”

Key challenges include:

• Public sector wage pressures – Unions secured a 5.5% wage increase this year, squeezing government budgets and limiting hiring.
• Declining mining output – Production rose just 1% in Q3 2024, with falling earnings.
• Part-time work replacing full-time jobs – While part-time employment grew, full-time roles dropped 0.1% quarterly and 0.3% yearly.

Can South Africa Turn the Tide?

Despite some positive signs—like a 6.1% quarterly rise in gross earnings and an 85.4% surge in bonuses—Jammine remains skeptical. “Short-term job growth looks bleak,” he says. “We need a concerted effort to reverse industrial decline and improve education for future-ready skills.”

With government debt at 72.2% of GDP and key sectors underperforming, the road to recovery remains steep. The new Government of National Unity may bring policy shifts, but without faster economic reforms, job creation will stay sluggish.