South Africa’s struggling manufacturing sector shed about 11,000 jobs in the fourth quarter, while construction firms cut another 13,000 roles, dealing a blow to the country’s formal employment statistics.
Stats SA’s quarterly employment statistics published on Tuesday showed a meagre (0.2%) rise in non-agricultural jobs between September and December.
Unlike Stats SA’s quarterly labour force survey (QLFS), which surveys individuals, the quarterly employment statistics survey businesses, capturing a snapshot of the labour market based on their payrolls.
This allows for insights into average earnings and total wages but excludes information about informal employment and job demographics, which are captured in the QLFS.
At about 10.55-million, the headline figure was just 18,000 jobs higher than in the third quarter and 102,000 below the reading in December 2024.
The drop in manufacturing roles, one of the main culprits behind the weak employment growth, aligns with an array of data releases suggesting that local factories are still too cautious about their outlook to increase investment or hire new workers in the near term.
Absa’s latest purchasing managers’ index (PMI) came in well below expectations while GDP data for the fourth quarter saw manufacturing emerging as the biggest dampener of economic growth last year.
Earlier in March, Stats SA reported that a 0.6% contraction in manufacturing helped restrict overall economic growth to 0.4% in the fourth quarter of 2025. The sector was also largely behind the sluggish expansion reported for all of 2025, which was 0.3 percentage points below the Treasury’s forecast of 1.4%.
Retail jobs
Headwinds were also reflected in industry data, which showed production falling by 1.4% year on year in December after a 2% contraction in November.
Manufacturing, which contributes about 12%-14% to GDP, continues to brace for higher production costs as the conflict in the Middle East rages on with no end in sight, pushing oil prices higher.
Fortunately, manufacturing job losses were offset by an uptick in retail and business services jobs and supported by a flat reading in the electricity sector.
The trade sector added the most positions in the fourth quarter, with 23,000 new full-time roles and 14,000 new part-timers, as sentiment among retailers rebounded during the festive season.
Wage data across the economy provided further encouragement, with gross earnings across all industries climbing 7.4% (or by R74.7bn) from September to December.
“Unemployment remains at a critically elevated level in South Africa, and while the domestic economy is on a more favourable growth trajectory, having made progress in tackling some key structural constraints, a number of impediments continue to drag [on] confidence and growth,” said Investec economist Lara Hodes.
“Moreover, the conflict in the Middle East has disrupted the global landscape, weighing on growth prospects, with uncertainty elevated.” — Business Day
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.