By Thanda Sithole
The Quarterly Labour Force Survey (QLFS), a household-based employment survey (not seasonally adjusted), reflected an increase in total employment during 4Q24 by 131 669 q/q, following an increase of 293 840 in the previous quarter. The level of unemployment declined by 19 573 q/q, bringing the total number of unemployed individuals to 7 990 947.
The faster increase in employment relative to unemployment resulted in the official unemployment rate falling by 0.2 percentage points (ppts) to 31.9%. The absorption rate also increased by 0.2ppts to 41.1%, the highest level since the 42.1% recorded in 1Q20—suggesting a steady improvement in the economy's ability to create jobs and absorb workers.
Despite this, youth unemployment remains critically high. The jobless rate for the 15-24 age group fell to 59.6% (from 60.2%), while for the 25-34 age group it declined to 39.4% (from 40.4%). This data underscores the urgent need to accelerate pro-growth structural reforms to drive sustainable and inclusive economic expansion.
Sectoral employment insights:
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Public sector (formal) : Employment in the community and social services sector declined by 29 129 q/q in 4Q24, following a 128 247 q/q increase in the previous quarter, bringing total employment in the sector to 3 405 485. Compared to the same quarter in 2023, employment rose by 58 739, reflecting significant job gains in public administration and defence, health and social work, and other service activities. While public-sector employment remains above pre-pandemic 2019 levels, it is increasingly under pressure from fiscal constraints and ongoing consolidation efforts.
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Private sector : Jobs in the formal non-agricultural sector (excluding the formal public services) increased by 119 472 q/q, fully reversing the 6 278 quarterly decline in 3Q24. Compared to the corresponding quarter in 2023, jobs in this sector increased by 132 867 to 8 273 680, underscoring strong private-sector employment gains. Large formal employment gains were recorded in financial intermediation, insurance, real estate, and business services (+179 025 q/q), reflecting 210 587 job gains in other business activities, partially offset by declines in insurance and pension funds, real estate activities, and computer-related sectors. This was followed by a 15 097 quarterly employment gain in formal manufacturing and a 12 267 increase in formal construction. Formal net job losses were recorded in wholesale and retail trade, motor trade, and hospitality (-41 467 q/q), transport, storage, and communication (-29 700 q/q), mining (-13 446 q/q), and electricity, gas, and water (-3 588 q/q).
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Agricultural and informal sectors : Employment in agriculture decreased by 11 014 q/q but increased by 3 601 y/y to 923 945. This decline is unsurprising given the 15.5% year-to-date contraction in agricultural GDP. However, the increase in the Agbiz Agribusiness Confidence Index at the end of last year and improving weather conditions suggest a potential near-term improvement. Informal employment, a crucial source of income for many South Africans, increased by 33 893 q/q and 147 193 y/y, reaching 3 328 461.
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Private households : Employment in private households increased by 18 446 q/q and 12 248 y/y to 1 146 271. However, the quarterly gain was not sufficient to fully offset the 32 398 net job losses recorded in 3Q24, indicating that households remain under pressure despite low inflation and modestly reduced monetary policy restrictiveness.
Outlook
While the 4Q24 QLFS data shows an improvement in the unemployment rate and reasonable employment gains, including a rise in the absorption rate, the labour market remains structurally constrained amid weak growth and a persistently high youth unemployment rate. We are encouraged by some alleviation in energy constraints and gradually stabilising logistics networks, which should support operating conditions and growth prospects. However, more infrastructure reforms and investment, along with improved governance and service delivery at the municipal level, will be critical to sustaining growth and meaningfully boosting employment.
