Cautious optimism in South Africa's labour market amid high unemployment

Economists are cautiously optimistic about South Africa’s labour market, even as unemployment remains stubbornly high.

According to the latest Quarterly Labour Force Survey (QLFS), the national unemployment rate fell slightly to 31.9% in the third quarter of 2025. Cape Town added 40 000 jobs during the same period — the highest quarterly gain among South African metros.

Economist, Dawie Roodt warned that the numbers don’t tell the full story. “There was an increase in employment but there was also an increase in people who are just not looking for jobs anymore,” he told the Cape Argus.

“People have lost hope. Officially, unemployment numbers came down a little bit, but that doesn’t really say much. It is technically an improvement, but unemployment of close to 32% is just a horrible number.”

Roodt said the country’s slow economic growth remains the key challenge. “The single most important underlying reason for this high number is that the South African economy is just not growing or not growing fast enough."

"Having said that, looking at the available data from various sources, I have a suspicion that, with a bit of luck, we are at the bottom of the unemployment cycle."

"I think there is a good possibility we could see an improvement in terms of economic growth and a slight improvement in unemployment. It’s a horrible number with lots of noise, but I am very cautiously optimistic that things could start looking a little bit better.”

Ulrich Joubert of Kruger International shared Roodt’s cautious optimism. However, he also urged care in interpreting the figures. “I anticipated that unemployment was going to remain quite stable or even rise, given some of the problems we have faced lately,” he said. “In terms of sustainability, I’m a little bit worried. We’ll have to be very careful and see what’s going to happen.”

Joubert noted that changes to the survey methodology this quarter could have influenced the numbers. “You have to take into account that there were adjustments made, so one is not entirely sure how much this contributed to the drop in unemployment,” he said. This highlights the difficulty of separating real improvements from statistical shifts.

Minister of Employment and Labour, Nomakhosazana Meth said while she noted the reduction of the unemployment rate released by the Statistics South Africa, Statistician General Risenga Maluleke, indicates a 1.3 percentage point decline from 33.2% in Q2 of 2025 to 31.9% in Q3. 

According to Stats SA, employment increased by 248 000 in Q3 of 2025, which follows a slight increase of 19 000 in Q2 of 2025.

Locally, Cape Town and the Western Cape continue to outperform the national average. The province’s unemployment rate is 19.7%, while the metro’s overall unemployment stands at 21.6%. The city’s growth has been driven by trade, transport, and construction.

“We are working tirelessly with stakeholders across various sectors to implement policies that will drive sustainable employment growth, particularly for young people who remain disproportionately affected. We urge businesses, educational institutions, and civil society to collaborate with us in addressing the unemployment crisis," Minister Meth said.

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Cape Argus