November 12, 2024

Employment Statistics in South Africa

2024Q3

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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Gross Operating Surplus

Company is crucial for investors and the government, influencing investment potential and tax revenue. The latest data from Statistics South Africa shows a 2.9% quarterly decrease in Gross Operating Surplus (GOS) but a 4.5% annual increase, indicating profitability growth. Notably, sectors like mining and transport exceeded inflation rates, signaling positive market sentiment and potential for increased investment in South Africa over the medium to long term.

South African Economic Performance

South’s economy unexpectedly contracted by 0.3% in Q3 2024, with six out of ten sectors growing. The agricultural sector significantly declined by 28.8%. Positively, manufacturing and finance showed growth, contributing to overall resilience. However, consumer demand and elevated prices in the economy remain concerns, while expected growth for 2024 is estimated at just 0.7%. Addressing policy clarity and structural reforms could enhance business confidence and stimulate growth.

Private Sector Credit Extension (PSCE)

In October 2024, credit extended by South African financial institutions rose by 4.3%, with increasing demand in most categories, despite remaining low overall. Recent interest rate cuts totaling 50 basis points may enhance property and fixed asset purchases in 2025 as consumers gain more disposable income, potentially boosting overall demand.

Producer Price Inflation

Producer Price Inflation in South Africa saw a deflation of 0.7% in October 2024, exceeding analysts’ expectations. This decline was driven by significant price drops in coke, petroleum, and related products. While overall inflation may remain low in the short term, rising costs for intermediate goods and administered prices raise concerns. Persistently low inflation could lead to interest rate cuts, potentially boosting consumer and business demand in 2025.

Another 25 Basis Point Interest Rate Cut

The South African Reserve Bank cut the interest rate by 25 basis points, contrary to some expectations for a larger reduction. Inflation remains within the target range of 3% to 6%, and positive signs for growth include rising confidence and stable electricity supply. Despite subdued manufacturing production, increased disposable income supports demand, contributing to a gradual economic recovery.