The average salary in South Africa experienced a notable increase during the third quarter (Q3) of 2024, rising from R27 511 in May 2024 to R28 220 in August 2024. This reflects a quarter-on-quarter growth rate of 2.6% and a year-on-year increase of 6.6%. These figures were documented by Statistics South Africa (Stats SA) in their Quarterly Employment Statistics (QES) report for Q3 of 2024.
Key Takeaways
- Salaries on the Rise: Average salaries in South Africa grew by 2.6% quarter-on-quarter and 6.6% year-on-year in Q3 2024, with basic salaries and wages increasing to R878.2 billion. Growth was driven by sectors such as trade, mining, and construction.
- Employment Challenges Persist: Despite salary growth, total employment in the formal non-agricultural sector fell by 133,000 jobs in Q3 2024, with significant losses in community services, business services, and manufacturing. Over the past year, 294,000 jobs were eliminated.
- Sectoral Contrasts: While sectors like trade and construction experienced employment growth, others, such as community services and electricity, faced significant declines. Full-time employment also fell slightly, raising concerns about increasing reliance on part-time and temporary work arrangements.
During September 2024, basic salaries and wages showed a marginal rise of 0.8%, equivalent to R6.7 billion, bringing the total to R878.2 billion. This improvement was driven primarily by wage increases in the trade, mining, manufacturing, business services, construction, electricity, and transport sectors. However, not all industries performed positively, as the community services sector experienced a decline during the same period.
Understanding the shifts in average salaries provides a clearer picture of the economic landscape. With the Minimum Wage Hike Proposed by National Commission for 2025, many industries could experience a significant recalibration in their pay scales, impacting workers across all sectors.
South Africa’s Total Employment Landscape
Despite the rise in salaries, the employment landscape in South Africa presented a more concerning picture. Total employment in the formal non-agricultural sector dropped by 133,000 during Q3, reducing the total workforce to approximately 10.6 million. The overall job losses for the year were even more striking, with 294,000 positions eliminated between September 2023 and September 2024.
This large-scale reduction in jobs highlights the challenges that South Africa continues to face in stabilising its labour market. Economic pressures, including subdued global demand, persistent energy shortages, and increasing costs of doing business, are significant contributors to the declining employment figures.
The community services sector was hit hardest, shedding 131,000 jobs over the year. The business services sector followed, with a loss of 15,000 jobs. The manufacturing industry also faced challenges, recording a decline of 4,000 jobs.
Community services, which include public administration, education, and healthcare, have struggled under budget constraints and declining government expenditure, resulting in significant cuts to the workforce. This signals potential strain on public service delivery and social programmes.
Smaller losses were observed in the transport and mining sectors, with reductions of 3,000 and 2,000 positions, respectively. Additionally, the electricity industry saw a modest decline of 1,000 jobs during this period.
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Bright Spots in Trade and Construction
Despite the widespread losses, the trade and construction sectors provided a glimmer of hope for the labour market. These industries recorded employment gains of 19,000 and 4,000 positions, respectively, mitigating some of the broader declines.
Increased activity in the trade sector can be attributed to improved consumer spending and the expansion of retail and wholesale operations, particularly in urban areas. Meanwhile, the modest growth in the construction industry is linked to renewed investment in infrastructure projects, both public and private, as South Africa seeks to address its infrastructure deficit.
In terms of full-time employment, the figures also pointed to a slight decrease. Between the second quarter (Q2) and third quarter (Q3) of 2024, full-time positions fell by 14,000, dropping from 9,468,000 to 9,454,000. This continued the overall trend of a challenging employment environment in South Africa, despite some areas of improvement.
Analysts have expressed concern that the decline in full-time positions could indicate a growing reliance on temporary and part-time work arrangements, which often come with lower pay and fewer benefits. This shift could exacerbate income inequality and reduce economic stability for many households.
Looking ahead, industry experts have urged for greater policy interventions to stimulate job creation and address the structural issues affecting key sectors. This includes improving energy supply, fostering entrepreneurship, and implementing targeted skills development programmes to align the workforce with evolving industry needs.
How does South Africa stack up against global salary trends? Understanding which jobs are in demand both locally and internationally can give you a competitive edge in the job market and help you make informed career choices.
Conclusion
South Africa’s Q3 2024 labour market data presents a mixed picture. While the rise in average salaries offers some positive news, the sharp decline in employment across key industries highlights structural challenges that require urgent intervention. Policymakers must focus on addressing underlying issues such as energy shortages, fostering business-friendly conditions, and investing in skills development to ensure sustainable economic growth and job creation. Without these efforts, the economic disparity between rising wages and shrinking job opportunities could deepen, further straining the country’s workforce and economy.
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