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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
November 12, 2024

Employment Statistics in South Africa

In Q3 2024, South Africa’s unemployment rate decreased from 33.5% to 32.1%, with the expanded rate falling to 41.9%. Formal non-agricultural employment rose by over 200,000, while 294,000 new jobs were created. Despite some sector losses, overall trends reflect a growing economic confidence and improved employment conditions.

The employment statistics for the third quarter of 2024 reveal encouraging trends, as the unemployment rate decreased from 33.5% in the second quarter to 32.1% for the quarter under review. Additionally, the expanded unemployment rate— which includes both unemployed individuals and discouraged job seekers—fell by 0.7%, from 42.6% to 41.9%.

In South Africa, formal non-agricultural employment rose by more than 200,000, increasing from 16.7 million to 16.9 million in the third quarter. Correspondingly, the number of unemployed individuals declined from 8.4 million to 8.0 million. Overall, 294,000 new jobs were created during Q3 of 2024, marking a significant rebound following a contraction of 92,000 jobs in the previous quarter.

Unemployment rates dropped in seven of the nine provinces, with only KwaZulu-Natal and Limpopo experiencing increases. Employment growth was noted across various sectors: the informal sector added 165,000 jobs, the formal sector gained 122,000 jobs, and the agricultural sector saw an increase of 39,000 jobs. However, the finance sector experienced the most significant job loss, with a reduction of 120,000 positions, according to StatsSA data.

Overall, these employment figures are positive, as the unemployment rate fell more than the consensus forecast of 32.9% for the third quarter. The decrease in unemployment can be attributed to a steady electricity supply and a renewed confidence in the economy, which are beginning to yield tangible improvements in what is often a challenging labour market in a developing country like South Africa.

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More Coverage

Budget Speech 2025

A Balancing Act
Much has happened in the last twelve months as well as the last month since the postponement of the February 2025’s budget. The big talking point and “bone of contention” was the mooted 2% increase in VAT. This increase was met with fierce resistance and made “balancing the budget” quite difficult, as the government has to decide between increasing taxes of cutting expenditures, leaving the Government of National Unity (GNU) between a “rock and a hard place” as it currently stands. The increase in VAT or other taxes sprout from the various expenditure items the government announced or want to implement which among other things include the National Health Insurance (NHI), a transformation fund and continuation of the Covid-19 relief grant and the possible introduction of a Basic Income Grant (BIG).

A View on Company Profits

2024 Q4
Company profitability is vital for investors and the government. In South Africa, the Gross Operating Surplus (GOS) indicates positive growth, with profits surpassing inflation in late 2024. Notable gains in the Agricultural sector (68.8%) contrast with modest growth in Mining and Personal Services, reflecting an optimistic economic outlook post-election.

A Sticky Affair

The South African Budget Speech Postponement
The Laffer Curve is an economic theory that describes the relationship between tax rates and tax revenue. Proposed by economist Arthur Laffer, the curve suggests that there is an optimal tax rate that maximizes government revenue without discouraging productivity, investment, and economic growth. The central idea is that increasing tax rates beyond a certain threshold can lead to diminishing returns; higher taxes may disincentivize work, entrepreneurship, and investment, ultimately reducing the overall tax base.

GDP, Economic Growth and Inflation

2024 Q4
The South African economy showed resilience with a 0.6% growth in the fourth quarter of 2024, despite challenges. Key sectors like Agriculture and Finance thrived, and improved consumer demand signals optimism for 2025. With continued market confidence and government reforms, there is potential for significant economic advancement ahead.

Private Sector Credit Extension (PSCE)

January 2025
In January 2025, credit demand rose by 4.6%, exceeding expectations, although overall demand is still modest. Interest rate cuts are expected to enhance property and asset purchases as disposable incomes improve. As consumers increasingly rely on credit, overall demand for goods and fixed assets is poised to rise throughout 2025
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