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Construction Labour Force 2008 - 2024Q2

South Africa's unemployment rate rose to 33.5 percent in Q2 of 2024, from 32.9 percent in Q1, marking a third consecutive quarter-on-quarter increase. The construction sector experienced another decline, down 0.9 percent q-q to 1 204 000, following the 8 percent q-q decline in Q1.  Compared to the same period in 2023, construction is clearly under pressure as the labour force shrunk by 7.7 percent y-y and on average 6.6 percent in the first six months of 2024 compared to the same period in 2023.  Western Cape recorded the steepest decline in Q2, likely linked to the slump in private sector building activity, with a 28 000 contraction in its labour force (down 11.8 percent q-q). By comparison Gauteng recorded the highest increase of 12 000, or 4.1 percent to 302 000.

Measured over the first six months of 2024, Gauteng, Eastern Cape and Limpopo showed the sharpest declines, with Gauteng showing the . strongest contraction, down 32 000 (or 9.8 percent y-y). Eastern Cape and Limpopo fell by an average of 25 000 or 18 percent y-y. Only two provinces recorded an increase namely Mpumalanga and Kwazulu Natal, up 9.4 percent and 3.6 percent respectively. Western Cape recorded a moderate 1.5 percent y-y contraction.

The construction industry contributed 7.2 percent to the total labour force of the country. The downturn in the construction labour market reflects the challenges of higher lending rates, weak economic sentiment, poor growth, and uncertainties surrounding the upcoming elections that slowed demand for private sector building construction. Despite some improvements in civil construction, they are insufficient to offset the sharp decline in the building sector at a national level, which represents about 50 percent of the total construction investment. However there are provincial differentiation. For example in Mpumalanga, the strong increase in civil construction offset the decline in the building market. The outlook for investment in Mpumalanga remains positive, as the pipeline for construction activity expanded by 30 percent y-y as at the 1st quarter of 2024. The pipeline in Kwazulu Natal has also shown a robust increase of 23 percent, supported by an increase in public building tenders as well as civil construction activity. The labour force in the Free State increased by 12 percent q-q in Q2, and given the robust increase in its construction pipeline, further growth in the labour force is anticipated. Free State is alo the only province that has shown a broad base increase in its construction pipeline, including private and public building as well as civil tenders.

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