South Africa’s Labour Market Contracts by 80,000 Jobs in Q2 2025 Amid Wage Growth Surge

South Africa’s formal non-agricultural sector shed 80,000 jobs in the second quarter of 2025, marking a 0.8% quarter-on-quarter decline from 10.589 million in March to 10.509 million in June.

This contraction, driven by steep losses in community services, trade, and manufacturing, occurred even as gross earnings rose by R2.2 billion to R986.8 billion, underscoring a growing disconnect between wage growth and job creation.

The largest contributor to the employment decline was the community services sector, which lost 53,000 jobs—a 1.9% drop. Trade followed with a reduction of 10,000 jobs (-0.4%), while manufacturing shed 9,000 (-0.7%). Construction, transport, and business services also posted losses. Only mining (+2,000 or +0.4%) and electricity (+1,000 or +1.6%) registered gains. Year-on-year, total employment fell by 229,000 or 2.1% between June 2024 and June 2025.

Full-time employment declined by 44,000 (-0.5%) quarter-on-quarter, with community services, business services, and manufacturing again leading the downturn.

Part-time employment saw an even sharper contraction of 36,000 jobs (-3.2%), with community services alone losing 39,000 positions (-8.1%). Year-on-year, part-time employment plunged by 13.7%, or 174,000 jobs.

Despite the employment losses, gross earnings increased by 0.2% quarter-on-quarter and 3.4% year-on-year. Basic salaries and wages rose by R21.7 billion (+2.5%) from March to June, reaching R902.8 billion. Year-on-year, this figure climbed by R31.2 billion (+3.6%).

However, bonuses paid to employees dropped sharply by R19.3 billion (-25.4%) quarter-on-quarter, though they rose 5.1% year-on-year. Overtime payments also declined by 1.0% quarter-on-quarter and 4.5% year-on-year.

Average monthly earnings increased by 3.4% from R28,322 in February to R29,290 in May, with a year-on-year rise of 6.5%.

Labour economist Thandi Mokoena commented, “The rise in gross earnings and average wages suggests that those still employed are earning more, but the simultaneous drop in employment points to a worrying trend of jobless growth. It’s a sign that productivity gains or wage inflation are not translating into broader employment opportunities.”

Sipho Dlamini, a union representative in the manufacturing sector, added, “We’re seeing factories automate and streamline operations, which boosts earnings for some but sidelines many workers. The 9,000 jobs lost in manufacturing this quarter are a wake-up call.”

Business analyst Lerato Mahlangu offered a more tempered view: “The uptick in mining and electricity employment, though modest, shows that targeted investment can yield results. But the broader picture demands urgent policy intervention to reverse the employment slide.”

As South Africa grapples with structural shifts in its labour market, the challenge remains to align wage growth with inclusive job creation especially in sectors like community services and manufacturing that have traditionally absorbed large numbers of workers.

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