South Africa's economic paradox: GDP growth amid job losses
The economy may have grown, but less people had jobs in the second quarter.
Image: Freepik
South Africa’s economy is in a contrasting phase: gross domestic product (GDP) is on the rise, yet formal-business employment is falling.
According to Statistics South Africa's latest data sets, national output grew by just under 1% in the second quarter of 2025, lifted by manufacturing, mining and trade.
Despite this, the economy shed 80 000 jobs compared with the first quarter, with community services hit hardest.
GDP can grow while jobs are lost due to structural issues in the economy such as high labour costs, poor labour absorption in certain sectors, or a lag in job creation from the growth.
There were also job losses in trade, manufacturing, construction, transport and business services. Mining and electricity added jobs, but not enough to offset the overall decline.
Provincial figures for 2024 show Limpopo at the front of the growth pack, expanding by just under 1 percentage point.
Finance, which includes real estate and business services, and personal services (such as hairdressers) were the main drivers.
These sectors were supported by utilities, transport and communication, general government, manufacturing and trade.
Agriculture, construction and mining lagged but did not prevent Limpopo from topping the growth charts.
Gauteng and Western Cape also posted strong gains, with Gauteng still contributing a third of national output.
Across the provinces, the top industries mix finance, personal services, mining, manufacturing and trade.
July 2025 monthly indicators painted a mostly positive picture, with mining, retail, construction, motor trade, tourism, catering and transport all showing growth.
The data underscores a delicate balancing act: South Africa’s economy is growing, yet job creation is lagging, leaving a mixed story for policymakers and workers alike.
IOL Business