Stagnant economy one of the reasons for unemployment rate: Analyst

Economist Andre Roux has attributed the high unemployment rate of 32,9% to the poorly performing economy, among other things.

Professor Roux says another contributory factor could be that some businesses are now resorting to using machinery and robotic methods instead of relying on manual labour.

Roux, an economist from the Stellenbosch School of Business, says the country may need to deal with the challenge of companies using technology and machinery as opposed to employing manual labour.

“One possible reason is that the economy is not growing. And even if it can grow that doesn’t guarantee job creation. You can grow the economy without using labour rather than using technology and machinery,” he says.

“That often happens because ironically and paradoxically, if I want to expand my production as a business, there’s no law that obliges me to employ labour to do so. However, if I do employ labour then I am subjected to whole range of laws. So, it is almost paradoxical where’s if I buy a machine or use a robot,” adds Roux.

Unemployment remains chronically high: Professor Andre Roux

Union federation, Cosatu, has expressed concern after South Africa’s unemployment rate increased by one percentage point in the first quarter of 2025.

The latest numbers released by Stats SA show that 16,8 million South Africans are employed, down from 17,1 million in the previous quarter.

The formal sector lost jobs, while the informal sector added jobs during the first three months of the year.

Cosatu Parliamentary Coordinator Matthew Parks says the latest results of the Quarterly Labour Force Survey have come as a shock.

“The expanded definition of improvement is increased by 1.2% over the previous quarters of about 43.1%. So, that’s quite depressing. This is for the first quarter of the year. So, it reflects normally a little bit of a post-Christmas holiday, post festive season slump, so to speak. There’s normally quite a bit of a pick up on the fourth quarter of the year because that’s Christmas, the retail sector, the tourism and hospitality sectors have quite a bit of a pick up,” says Parks.

Stats SA | Unemployment numbers are really worrying: Cosatu’s Zanele Sabela