Agriculture, Economic Development and Tourism

Quarterly employment figures can be volatile and influenced by short-term economic fluctuations. A decline in jobs from one quarter to the next should be interpreted with caution, as it may reflect temporary disruptions rather than underlying structural issues.

In the Western Cape, the second quarter typically brings a sharper drop in temperature compared to other coastal regions, which affects seasonal industries and employment patterns. These effects tend to normalise as conditions improve in subsequent months. This is confirmed when compared to second quarters over a 5-year period in the Western Cape. 

Year-on-year comparisons offer a more reliable measure of labour market progress, as they smooth out short-term volatility and seasonal effects. According to Stats SA, in Q2 2025, the Western Cape added 69,000 jobs compared to the same quarter in 2024; marking the third-highest employment gain nationally. The unemployment rate over this period declined from 22.2% to 21.1%.

This indicates that the province not only exceeded its previous labour market performance in both employment and unemployment but did so under similar seasonal conditions—reinforcing the strength of its underlying economic momentum.

1. Evidence of effectiveness of the Growth for Jobs (G4J) Strategy

The G4J Strategy was officially adopted in 2023 with 2024/25 being the first full budgetted year of implementation. Therefore, when viewed over this longer horizon, with 2022 as the base year, there is also evidence that the labour market in the Western Cape has improved since the adoption of the G4J Strategy in 2023.

• Unemployment rate: In 2022, the base year prior to the adoption of the G4J Strategy, the province’s unemployment rate averaged 24.9%. By 2025 (Q1 and Q2 average), it had fallen to 20.4%. Therefore, over this period, the unemployment rate in the province declined by almost one fifth. When compared to the national declines, the Western Cape’s economy has performed better, as the national rate declined more modestly. National unemployment declined over the same period, from 33.5% to 32.0% (which, in contrast, represents a decline of about one twentieth). This comparison excludes 2020 and 2021, as labour market outcomes in those years were significantly distorted by the effects of Covid-19 and are therefore not directly comparable to the G4J Strategy period.
• Employment levels: Employment rose from an annual average of 2.42 million in 2022 to 2.80 million in 2025, with growth more than double the pace observed in the pre-Covid years 2016–2019. This also notably faster when compared to a national increase over the same period, from 16.48 million jobs in 2022 to 16.81 million in 2025.
• Absorption rate: The employed-to-population ratio increased from 49.2% in 2022 to 54.8% in 2025, reflecting stronger labour market participation (i.e. the probability of being employed is higher during the G4J period, than before the implementation of the G4J Strategy). This rate of improvement is significantly faster than that achieved in the 2016–2019 period, when absorption was largely flat. A similar pattern is observed in the absorption rate (the employed-to-population ratio), when compared to national rates, where the national figure increased only marginally from 40.7% to 41.1%.

These indicators suggest that, while quarterly results may fluctuate, the province’s labour market has experienced sustained improvement since 2022, consistent with the objectives of the G4J Strategy.

2. While the long-term trend is positive, we are not complacent and are taking consistent and urgent action to protect the provincial economy from global and national headwinds, and to accelerate job creation. The G4J 2025 - 2030 Implementation Plan, adopted in Q1 2025, has been designed to allow for flexibility and responsiveness to the global and local economic climate, and remains robust in response to short term labour market fluctuations.

Cumulatively, all projects in the G4J implementation plan support the outcome of creating an enabling economic environment that creates jobs. The plan includes several high-priority interventions related to job creation, which are being implemented:

• Developing a strong investment pipeline: A key constraint to the creation of jobs, is relatively muted economic growth at the global and national, and local levels. Providing a direct channel for investors to raise constraints and unlock expansions is essential to spurring economic and therefore job growth, thereby safeguarding existing jobs and enabling new employment opportunities in high-growth industries. The Western Cape Investment Summit (WCIS) to be held in November 2025 will be a key platform to create this pipeline.
• Career guidance and life orientation: A major barrier to employment is the gap between what young people are prepared for and the skills the labour market requires. Expanding career guidance and life orientation programmes is aimed at improving work readiness, ensuring that more learners are able to transition into post-school training and ultimately into jobs.
• Schools with Special Focus Areas: A critical challenge for employment creation is the shortage of technically skilled workers. Expanding Schools with Special Focus Areas in the FET band directly addresses this by equipping learners with vocational and technical skills that are in demand, enabling them to access jobs more quickly and reliably.
• Entrepreneurship and post-school pathways: Given that SMMEs and new enterprises are key drivers of job creation, interventions to stimulate entrepreneurship, enhanced SMME participation in value chains, and self-employment are central to broadening employment opportunities, particularly in sectors where formal job growth is constrained.
• Township Economic Growth Strategy: Persistent unemployment in township areas reflects both limited local opportunities and barriers to accessing jobs elsewhere. The township strategy and targeted action plans aim to create employment by opening opportunities in sectors such as early childhood development and the care economy, while addressing enabling infrastructure like Wi-Fi and clinics to support job-rich local economies.
• Infrastructure interventions: High transport and logistics costs act as a brake on business expansion and, by extension, job creation. Advancing projects such as the Cape Town Integrator (Wingfield Scheme and R300 Ring Road) and improving efficiency at the Port of Cape Town through the Port Project Management Unit are designed to lower costs for firms, sustain competitiveness, and enable both job retention and the creation of new jobs in trade, logistics, and related industries.
• Work and skills: The Department’s work placement programme is a significant contributor to improving youth employability, as it enables young people to gain practical experience in companies for a set period, with stipends partly sponsored by the Department, thereby easing their transition into longer-term employment.