7 days ago
South Africa's Unemployment Rate Rises to 33.2% in Q2 Amid Weak Job Growth
South Africa's unemployment rate edged higher again in the second quarter of 2025, reaching 33.2%, data released by StatsSA reveals. This marks an increase of 0.3 percentage points from the first quarter, surprising economists who had predicted a more modest rise to 33%.
To provide insight into the figures, Nkosi Pendile-Shange, economist at the Bureau for Economic Research, joined us for analysis.
'The upward trend in unemployment was somewhat expected given ongoing economic pressures, especially during the first two months of Q2,' Pendile-Shange said. 'However, the magnitude of the increase was larger than we anticipated.'
Sectors Behind Job Losses
Of the ten major sectors tracked, six recorded a decline in employment during the quarter. Notably, the utilities sector, which had previously shown growth through renewable energy projects, unexpectedly shed 6,000 jobs. The financial services sector, traditionally a key driver of employment, lost a significant 24,000 jobs. Agriculture also saw a loss of 24,000 positions, although it represents a smaller share of total employment.
'While agriculture's impact is smaller, the loss of jobs in financial services is concerning given its size relative to other sectors,' Pendile-Shange explained.
Manufacturing continued its downward employment trend, consistent with Purchasing Managers' Index (PMI) data earlier this year. However, recent data offers some optimism: manufacturing output increased in June, and early July PMI readings point to improving economic activity, which could lead to job creation in coming months.
Looking Ahead: Changes to Unemployment Data Collection
StatsSA plans to revise its quarterly labour force survey starting next quarter, incorporating new questions designed to better capture informal sector employment. This move follows comments from former Capitec CEO, Kherifa Rhee, who suggested South Africa's unemployment rate might be significantly lower if informal work was more accurately measured.
Pendile-Shange cautioned against expecting dramatic changes: 'While StatsSA is following international standards, it's important to note that many people self-report as unemployed even if they engage in informal income-generating activities. The adjustment may offer deeper insights but is unlikely to reduce the official rate from over 33% to, say, 10%.'
He added that informal employment is substantial in sectors like construction and trade, where up to a third and half of jobs, respectively, are informal, but many workers still identify as unemployed if they lack formal jobs or consistent income.
The Bigger Picture
South Africa's labour market remains under pressure amid sluggish economic growth and structural challenges. The latest data underscores the urgent need for targeted interventions to stimulate job creation, particularly in sectors that have historically absorbed large numbers of workers.
As economists and policymakers await the revised StatsSA data next quarter, the hope is that a clearer picture of informal employment will inform strategies to tackle unemployment more effectively.
