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Earnings up, jobs down in South Africa’s formal sector

South Africa’s formal non-agricultural employment fell by 74 000 jobs in the first quarter of 2025, marking a 0.7% decline.

According to the latest Quarterly Employment Statistics (QES) from Stats SA, the total number of employed people in this sector dropped from 10.65 million in December 2024 to 10.58 million by March 2025.

Compared to the same period in 2024, employment decreased by 95 000 jobs, indicating a persistent downward trend over the past year.

Wages, however, painted a slightly more positive picture. Average monthly earnings rose by 5.6% between February 2024 and February 2025, reaching R28,289.

This increase outpaced the inflation rate of 3.2% for the same period, resulting in a real income gain of 2.4% for employees. Still, this figure was marginally lower than the peak of R28,316 recorded in November 2024.

The trade industry bore the brunt of job losses during the quarter, shedding 52 000 positions. Community services followed, losing 17 000 jobs, while mining saw a decline of 4 000.

Electricity, construction, and business services each recorded job losses of 1 000, while employment in the transport sector remained unchanged.

Full-time employment also declined significantly, falling by 55 000 jobs quarter-on-quarter. The total number of full-time workers decreased from 9.503 million in December 2024 to 9.448 million in March 2025.

The trade sector saw the steepest decline, with 34 000 fewer full-time positions, while business services and community services lost 11 000 and 10 000 jobs respectively.

Mining and electricity each saw modest drops, while construction bucked the trend by adding 5 000 new full-time roles. Manufacturing and transport employment remained stable. On a year-on-year basis, full-time employment fell by 40 000 jobs.

Part-time employment wasn’t spared either. It dropped by 19 000 positions, decreasing from 1.150 million to 1.131 million between December 2024 and March 2025.

The trade industry again led the decline, shedding 18 000 part-time jobs, followed by community services (down 7 000) and construction (down 6 000).

Electricity and transport recorded no change, while business services and manufacturing actually added 10 000 and 2 000 part-time roles respectively. Overall, part-time employment fell by 55 000 year-on-year.

Gross earnings also declined in the first quarter, falling by 4.6% from R1 031 billion in December 2024 to R983.1 billion in March 2025. The largest declines were recorded in community services (down R12.8 billion), manufacturing (R10.8 billion), and trade (R10.7 billion), with construction, transport, electricity, and mining also contributing to the downward trend.

The only sector to report growth in gross earnings was business services, which saw an increase of R610 million. Year-on-year, however, gross earnings were up by 2.7%, or R26.1 billion.

Basic salaries and wages declined by 1.1%, a drop of R9.4 billion, bringing the total to R881.1 billion.

Bonus payments saw the steepest quarterly drop, falling by R36.5 billion—or 32.5% – from R112.3 billion in December to R75.8 billion in March. The decline was widespread, affecting community services, manufacturing, trade, construction, transport, and electricity.

Business services, however, recorded a gain. Compared to the same period in 2024, bonus payments were down by 6.9% or R5.7 billion.

Overtime payments also contracted, dropping by 5.1% or R1.4 billion to a total of R26.3 billion. While most industries contributed to the decline, the community services sector reported an increase in overtime. Year-on-year, overtime payments fell by 4.7% or R1.3 billion.

South Africa’s economy slows in Q1 2025

South Africa’s economy barely grew in the first quarter of 2025 (January–March), expanding by just 0.1% compared to the fourth quarter of 2024, according to Statistics South Africa (StatsSA).

On the production (supply) side, only four of the ten major industries posted positive growth, with agriculture leading the way.

On the demand side, modest gains in household consumption, stronger exports, and inventory drawdowns helped keep the economy in positive territory.

Agriculture surged by 15.8%, contributing 0.4 percentage points to GDP growth, largely thanks to good rainfall. Horticulture performed especially well, and animal production also posted solid gains. Without this agricultural boost, the overall economy would have contracted by 0.3%.

The transport, storage & communication sector was the second-largest positive contributor, supported by growth in land and air transport, along with transport support services.

Consumer activity improved modestly, with the trade, catering & accommodation sector growing by 0.5%. Positive contributions came from retail and motor trade, accommodation, and food and beverages.

The biggest drags on the economy were mining and manufacturing, which together subtracted 0.4 percentage points from GDP growth.

Mining output declined by 4.1%, mainly due to a sharp drop in platinum group metals. Coal, chromium ore, gold, copper, and nickel also underperformed. Although iron ore, manganese, and diamonds recorded gains, it wasn’t enough to lift the sector into positive territory.

Manufacturing also slowed, impacted by weak output in petroleum & chemicals, food & beverages, and motor vehicles & transport equipment.

Only three of ten manufacturing divisions saw growth: textiles & clothing, wood, paper & publishing, and radio, television & professional equipment, according to the latest StatsSA manufacturing release.

After a 310-day reprieve, load shedding returned in Q1, contributing to a 2.6% decline in the electricity, gas & water sector – its worst performance since Q3 2022 (-2.8%). Lower water consumption further dragged down the sector’s performance.

On the expenditure side, GDP grew by the same marginal 0.1%, reflecting subdued economic momentum.

Household consumption expanded for a fourth straight quarter, lifted by higher spending on transport (especially vehicles), food & non-alcoholic beverages, restaurants & hotels, miscellaneous goods & services, and health. However, consumers spent less on recreation, culture, and communication, according to StatsSA.

Despite the slow start to the year—and political pressures surrounding fiscal policy – finance minister Enoch Godongwana remains optimistic about the medium-term economic outlook.

Notably, he tabled a national budget for the third time in a single calendar year in May.

According to the Treasury’s projections, real GDP growth is forecast at:

-1.4% in 2025
-1.6% in 2026
-1.8% in 2027

This comes even as the International Monetary Fund (IMF) recently revised its 2025 forecast downward to a flat 1.0%.

The South African Reserve Bank (SARB) is more aligned with the IMF, forecasting 1.2% growth in 2025, rising to 1.8% by 2027.

A Reuters poll of 26 economists (May 22–27) put South Africa’s growth at 1.2% for 2025, down from last month’s 1.5% forecast, and revised the 2026 estimate slightly lower to 1.6%.

Nedbank economists had forecast no quarterly growth in Q1: “Real GDP is forecast to make no gains in Q1, slowing from 0.6% in Q4 2024.”

Still, they struck a cautiously optimistic tone for the rest of the year:

“We expect the economy to recover in 2025. Our forecast is for growth of 1.0% for the year, averaging 1.5% over the next three years. SA’s structural constraints remain pretty much the same, with only minor improvements from the previous year. On the cyclical front, lower inflation and interest rates will provide impetus to demand.”

Average monthly salaries in South Africa

South Africa’s formal non-agricultural sector saw a modest recovery in the fourth quarter of 2024, with employment rising by 12,000 jobs.

However, a closer look at earnings data reveals mixed trends in the country’s job market.

According to the latest Quarterly Employment Statistics (QES, Q4:2024) from Statistics South Africa (Stats SA), average monthly earnings (AME) declined slightly by 0.2% on a quarterly basis, dropping from R28,274 in August 2024 to R28,231 in November 2024.

However, when compared to the same period last year, earnings grew by a healthy 5.3%, highlighting the resilience of the labour market in the face of broader economic challenges.

The average salary increase for South African employees in 2025 is expected to range between 5.5% and 5.7%. However, experts caution that this boost will likely fall short of offsetting inflation and the effects of tax bracket creep.

The electricity sector reported the highest average monthly earnings, significantly surpassing the overall average. The mining and community services industries also showed competitive salaries, followed by strong wage levels in transport and business services.

On the other hand, manufacturing, construction, and trade sectors recorded wages below the overall average, reflecting the varied economic conditions and challenges faced by each industry.

The modest increase in average monthly earnings coincided with a slight overall rise in employment. In the final quarter of 2024, South Africa’s formal non-agricultural sector added 12,000 jobs, bringing the total number of employed individuals to 10.64 million by December 2024.

This represents a 0.1% increase compared to the previous quarter, despite a year-on-year decline of 91,000 jobs since December 2023.

The trade industry was the biggest contributor to this growth, adding 42,000 jobs in the final quarter of the year. Business services also played a significant role, contributing 22,000 new jobs.

However, the community services sector saw the largest loss, shedding 26,000 positions, while both the construction and manufacturing industries lost 13,000 jobs each.

Full-time employment saw a modest increase of 10,000 jobs in Q4, growing from 9.477 million to 9.487 million. The trade sector was again the main contributor, adding 24,000 full-time positions, with business services following closely behind with an increase of 21,000 jobs.

Other sectors, such as transport and electricity, also saw small gains. However, full-time employment remains lower than it was a year ago, with a decline of 26,000 full-time positions between December 2023 and December 2024.

Part-time employment also showed a slight uptick, increasing by 2,000 jobs from 1.151 million in September 2024 to 1.153 million in December. The trade sector was the main driver of this growth, adding 18,000 part-time positions, while business services and construction sectors each contributed an additional 1,000 jobs.

On a year-on-year basis, part-time employment dropped significantly, with 65,000 fewer part-time jobs compared to December 2023.

Total gross earnings in the formal sector saw a substantial increase of 6.1%, reaching R1.03 trillion in December 2024, up from R969.4 billion in September.

This growth was driven by gains in the trade sector, which contributed an additional R13.6 billion in earnings, as well as increases in manufacturing and community services earnings, which rose by R13 billion and R12.4 billion, respectively.

The mining industry was the only sector to report a decline in earnings, with a decrease of R910 million.

Salaries, Wages, and Bonuses

Basic salaries and wages increased by 0.8% (R9.5 billion), reaching R889.7 billion by December 2024. The community services, trade, manufacturing, business services, transport, construction, and electricity industries were the key drivers behind this growth.

However, the mining sector again reported a decline in salaries and wages.

Bonus payments surged by 85.4% (R51.8 billion) in Q4 2024, climbing from R60.7 billion in September to R112.5 billion in December.

This sharp increase was primarily due to higher bonus payouts across various industries, including manufacturing, trade, community services, and business services.

Year-on-year, bonus payments grew by 3.2%, adding R3.4 billion compared to December 2023.

Meanwhile, overtime payments saw a decline of 7.7% (R2.2 billion), dropping to R26.4 billion in the fourth quarter of 2024. Despite the overall drop, certain industries, such as manufacturing, trade, and construction, reported increases in overtime payments.

On a year-on-year basis, overtime payments decreased by R2 billion, marking a 7.1% decline from the previous year.

South Africa economy up by 0.6% in fourth quarter

South Africa’s gross domestic product (GDP) grew by a sluggish 0.6% in the fourth quarter of 2024, following a contraction of 0.1% in the third quarter. 

Growth was led by agriculture, finance and trade on the supply (production) side of the economy. Household spending led growth on the demand (expenditure) side, said StatsSA on Tuesday.

Annually, the GDP grew by 0.6% in 2024 compared with 2023.

Agriculture had the most significant positive impact on GDP growth on the supply side of the economy.

Following a sharp decline in the third quarter, the industry rebounded by 17.2%, lifting GDP growth by 0.4 of a percentage point. This was mainly due to a rise in the production of field crops and animal products, said StatsSA.

The finance, real estate & businesses services industry grew for an eighth consecutive quarter, with financial intermediation, real estate activities and other business services the largest positive contributors to growth.

The trade industry expanded on the back of increased retail, wholesale and motor trade sales. This reflected positively on the demand side of the economy, with household consumption spending rising in the fourth quarter.

Seven industries performed poorly, with manufacturing and transport, storage & communication the most significant negative contributors to growth.

Manufacturing was mainly pulled lower by weaker production levels in the metals & machinery and automotive divisions.

Transport, storage & communication recorded a fourth consecutive quarter of decline. The industry witnessed a pullback in land transport and transport support services.

Mining activity was down on weaker production levels for manganese ore, iron ore, gold, chromium ore, nickel and copper. Coal and platinum group metals were positive, but not enough to keep the industry above water.

Trade and mining turn to inventories to meet demand

The demand side of the economy – measured by expenditure on GDP – was mainly lifted by a rise in household consumption spending.

Households spent more on a range of products; most notably, clothing & footwear, food & non-alcoholic beverages, recreation & culture, and household goods.

The data suggest that consumers might have more breathing space than they did a year ago. In real terms, households spent 2,3% more in the fourth quarter of 2024 compared with the fourth quarter of 2023. The trade industry increased its size by 1,6% over the same period.

The economy witnessed a R16,4 billion drawdown in inventories, in part due to the trade industry accelerating efforts to meet demand that exceeded supply.

Mining also drew from its stockpiles to address a rise in export demand while production lagged, contributing to the overall drawdown in inventories, the stats body said.

Investment in infrastructure and other fixed assets (gross fixed capital formation) was weaker in the fourth quarter, mainly because of a decline in residential buildings, machinery & other equipment, and non-residential buildings.

The finance industry was the notable bright spot, pushing GDP growth higher by 0,8 of a percentage point.

Electricity, gas & water, personal services and mining also expanded in 2024. On the downside, agriculture and trade were the most significant drags on growth.