Agriculture, Economic Development and Tourism
With reference to the latest Quarterly Labour Force Survey (QLFS) for quarter 1 of 2026 that indicates that employment in the Western Cape declined by 24 000 jobs between quarter 4 of 2025 and quarter 1 of 2026, while the province’s unemployment rate increased from 18,1% to 19,6%:
What are the primary factors that have been identified by his Department as contributing to the increase in unemployment and the loss of 24 000 jobs in the province?
In Q1:2026, the South African unemployment rate was 32.7%, while the Western Cape recorded a significant lower unemployment rate of 19.6%. At a national level, total employment declined by 345 000, while the Western Cape similarly experienced a decline of 24 000 jobs between Q4:2025 and Q1:2026. This pattern clearly indicates that the decline in employment in the province forms part of a broader nationwide contraction, rather than being driven by province-specific factors alone. The extent of the decline in employment reflects persistent labour market challenges in both the South African and the provincial labour markets.
Table 1: Western Cape formal and informal sector trends, 2025Q4 – 2026Q1 (q-on-q, %)
| 2025Q4 | 2026Q1 | Q-on-Q change (#) | Q-on-Q change (%) |
Formal sector | 2 274 000 | 2 254 000 | -20 000 | -0.9% |
Informal sector | 480 000 | 467 000 | -13 000 | -2.7% |
Private households | 153 000 | 162 000 | 9 000 | 5.9% |
Total for Western Cape | 2 906 000 | 2 883 000 | -24 000 | -0.8% |
Importantly, the job losses in the Western Cape were broad-based, affecting both the formal and informal sectors. Formal sector employment declined by approximately 20 000 jobs, while the informal sector lost around 13 000 jobs over the same period. This suggests that the weakening labour market conditions were not confined to a single segment of the economy but were widespread across different types of employment.
In addition, seasonal factors are likely to have contributed to the observed decline too. Employment typically weakens in the first quarter of the year, following increased hiring during the fourth quarter associated with festive season demand. As a result, some of the job losses observed in Q1:2026 can be attributed to the unwinding of temporary or seasonal employment opportunities.
Table 2: Changes in employment levels by sector: National vs Western Cape, 2025Q1 -2026Q1
Changes in employment levels by sector | ||||||
Sector | National | Western Cape | ||||
Q–on–Q (2025Q4-2026Q1) | Y–on–Y (2025Q1-2026Q1) | Number of Jobs, 2026Q1 | Q–on–Q (2025Q4-2026Q1) | Y–on–Y (2025Q1-2026Q1) | Number of jobs, 2026Q1 | |
Agriculture | 10 000 | 30 000 | 960 000 | 34 000 | 5 000 | 249 000 |
Mining | 32 000 | 45 000 | 476 000 | 0 | -1 000 | 5 000 |
Manufacturing | 39 000 | -90 000 | 1 587 000 | -20 000 | -37 000 | 300 000 |
Utilities | -21 000 | -32 000 | 113 000 | 0 | 2 000 | 13 000 |
Construction | -111 000 | 74 000 | 1 314 000 | -9 000 | 13 000 | 258 000 |
Trade | -6 000 | 92 000 | 3 320 000 | 16 000 | 81 000 | 573 000 |
Transport | -29 000 | -20 000 | 1 111 000 | -3 000 | -7 000 | 188 000 |
Finance & other business services | -23 000 | -69 000 | 2 939 000 | 15 000 | -7 000 | 588 000 |
Community & social services | -206 000 | -86 000 | 3 828 000 | -63 000 | -30 000 | 546 000 |
Private households | -28 000 | 23 000 | 1 101 000 | 9 000 | 4 000 | 162 000 |
*As per Statistics South Africa, figures under 10 000 should be referenced with caution, as the sample size is too small for reliable estimates.
* Due to rounding, numbers do not necessarily add up to totals reflected in the official QLFS publication.
Source: StatsSA QLFS, 2026Q1
From a sectoral perspective, significant job losses were recorded in some labour-intensive sectors within the provincial economy. Most notably, the community and social service sector experienced substantial declines, with 206 000 jobs lost nationally and 63 000 jobs lost in the Western Cape. This sector is heavily reliant on donor and public funding, and is therefore vulnerable to reductions in funding, project closures, or the non-renewal of fixed-term contracts. Evidence suggests that global funding constraints may have contributed to job losses in areas such as healthcare and research, further exacerbating employment declines. For example, a WITS University 2025 study estimated that cuts to PEPFAR and USAID funding had an immediate impact, resulting in over 8,000 skilled healthcare workers losing their jobs. The same study reported that WITS University alone lost R3.2 billion, placing a number of research jobs at risk.[1] These developments are likely to have had spill over effects in provincial labour markets such as the Western Cape.
However, reduced global funding is likely only one component of a broader set of factors driving jobs losses. As noted above, declines in manufacturing employment may be linked to a softening in demand following the festive season, as well as reduced household spending in the first quarter. Similarly, the contraction observed in construction and transport activities reflects broader economic weakness.
In summary, the drivers of job losses are complex and the increase in unemployment and the loss of 24 000 jobs in the Western Cape between Q4:2025 and Q1:2026 can be attributed to a combination of factors. These include a national economic slowdown, sectoral job losses, structural weaknesses in the labour market, and seasonal employment effects. These factors, along with others, point to a challenging labour market environment in which both demand for labour and job sustainability have weakened, rather than indicating a shock unique to the province.
