Introduction
This factsheet is a short summary of the performance of the labour market on a national and a city level using the latest findings of Statistics South Africa’s (Stats SA’s) Quarterly Labour Force Survey (QLFS)1. These statistics will be unpacked in greater detail in the next edition of EPIC.
Table 1: Labour Market Indicators for South Africa and Cape Town, 2023: Quarter 3 (Q3)
* No metro-level data available for 2021 Q4.
1. South Africa’s Labour Market Performance
At a national level, in the third quarter of 2023, the working age population (40,8 million individuals) and the labour force (24,5 million individuals) increased on both a quarter-on quarter and year-on-year level. The number of employed individuals increased on both a quarter-on-quarter (up by 399 000 individuals) and a year-on-year basis (up by 979 000 individuals) to a total of 16,7 million individuals finally exceeding pre-covid levels. Similarly, formal and informal employment increased on a quarter-on-quarter and year-on-year level to record a total of 11,6 and 3,1 million individuals, respectively. This led to increases in both the labour absorption and labour force participation rates on both a quarter-on-quarter and year-on-year basis for the third quarter of 2023.
Unemployment decreased on a quarter-on-quarter level (down by 72 000 individuals) and increased on a year-on-year (up by 124 000 individuals) basis to a total of 7,9 million individuals. The increase recorded in the employed and the decrease recorded in unemployment resulted in a slight decrease in the strict unemployment rate to 31,9% for this quarter when compared to the second quarter in 2023 (32,6%). The strict unemployment rate is lower when compared to the same period in 2022 (32,9%). Positively, discouraged work seekers decreased strongly on a quarter-on-quarter and year-on-year level to record a total of 3,1 million individuals at the end of this quarter. The broad unemployment rate decreased on both a quarter-on-quarter (down by a 0,9 percentage point) and year-on-year (down by 1,9 percentage points) level to record 41,2% at the end of the third quarter of 2023.
2. Cape Town’s Labour Market Performance
When compared to the second quarter of 2023, Cape Town’s working age population (3,1 million individuals) and the labour force (2,2 million individuals) increased and, similarly, when compared to the same quarter of 2022. After its five consecutive quarters of positive employment growth, Cape Town’s employment decreased by 16 000 individuals to record a total of 1,75 million individuals when compared to the second quarter. It remains higher by 205 000 individuals when compared to the same period in 2022. See figure 1. Unfortunately, this led to marginal decreases in both the labour absorption (to 54,8% from 55,5% ) and labour force participation (to 71,3% from 71,5%) rates when compared to the previous quarter. Both rates recorded higher levels when compared to the third quarter of 2022.
Figure 1: Employment level versus Broad unemployment rate trends, Cape Town (2015: Q1 – 2023: Q3)
Formal employment (which represents the bulk of employment in Cape Town) decreased on a quarter-on-quarter level (down by 14 000 individuals) while increasing on a year-on-year (up by 84 000 individuals) level to record 1,38 million individuals for this quarter. This is the second straight quarter of negative growth recorded for the formal employment. Similarly, informal employment decreased on a quarter-on-quarter (down by 2 000 individuals) and year-on-year (up by 76 000 individuals) level to record a total of 235 000 individuals at the end of the third quarter. Private households, also, recorded a quarter-on-quarter decrease (down by 7 000 individuals) while increasing on a year-on-year level (up by 34 000 individuals). The agriculture sector increased on both a quarter-on-quarter (up by 7 000 individuals) and year-on-year (up by 11 000 individuals)at the end of this quarter.
The number of (searching) unemployed people in Cape Town increased on a quarter-on-quarter level (up by 17 000 individuals) and decreased on a year-on-year (down by 40 000 individuals) level to record a total of 525 000 individuals at the end of this quarter. The decrease recorded in employment and the increase recorded in unemployment resulted in a higher strict unemployment rate (23,1%) when compared to the second quarter of 2023 (22,4%). The strict unemployment rate is lower by 3,7 percentage points when compared to the third quarter of 2022 (26,8%). The number of discouraged work seekers increased on a quarter-on-quarter basis to record a total of 40 000 individuals at the end of the third quarter. On a year-on-year level the number of discouraged work seekers remains higher by 12 000 individuals. This is the highest recording to date for this category. The decrease in employment and the increase recorded in the searching unemployed as well as in the non-searching categories, led to a higher broad unemployment rate of 25,7% from a previous 24,3% in the second quarter of 2023. This rate is lower by 3,8 percentage points when compared to the same quarter in 2022. At 25,7%, Cape Town’s broad unemployment rate remained lower than any of the other metros in South Africa.
For the third quarter of 2023, the labour market conditions improved considerably for South Africa. Employment levels increased and returned to pre-covid levels, unemployment and non-searching categories recorded decreases leading to strong drops in both unemployment rates. On the other hand, Cape Town’s labour market deteriorated when compared to the previous quarter. Sadly, the city’s employment level dropped after a solid five straight quarters of employment growth and similarly; both unemployment rates increased after 4 consecutive quarters of recording a decrease. Furthermore, discouraged work seekers recorded its highest figure since the start of the QLFS in 2008. On a year-on-year level, all of Cape Town’s key labour market indicators improved, which largely can be attributed to the strong employment growth experienced from the second to fourth quarters of 2022.
Conclusion
While, Cape Town’s employment levels exceeded pre-covid levels at a much quicker rate than the country and other metros, highlighting the city’s resilience, the labour market indicators this quarter suggest that the post-covid employment windfall has now slowed. The two consecutive quarters of decline in formal sector employment is of concern as it remains the bedrock of the city’s employment (with an average share of 82%). The next QLFS release will be of great interest to see in which direction the labour market proceeds.