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Construction Labour Force 2008 - 2025Q1

Seasonal Slowdown Hits Construction Jobs in Q1, But Year-on-Year Growth Driven by Informal Sector

The construction sector typically sees a decline in employment during the first quarter of the year, as activity slows down after the rush to complete projects in the final quarter. This seasonal pattern continued in Q1 2025, with the sector shedding 119,000 jobs since the end of 2024. Job losses were reported in both the formal and informal markets. The formal construction workforce declined by 0.4% to 762,000, while the informal segment contracted by 7.7% to 478,000.

Despite this quarterly drop, the overall construction labour force is 2% higher than the same period in 2024, driven mainly by growth in informal employment. Year-on-year, the formal construction workforce increased only marginally by 0.4%, while the informal segment grew by 4.7%.

Several provinces saw higher unemployment rates in Q1, including the Eastern Cape (39.3%), Northern Cape (29.5%), KwaZulu-Natal (32.3%), and Limpopo (33.3%), all of which also recorded declines in construction employment. The Western Cape maintained the lowest unemployment rate at 19.6%, while the North West Province had the highest at over 40%, although this was a slight improvement from 41.3% in the previous quarter.

The largest contributions to the overall job losses in construction came from Limpopo and KwaZulu-Natal, which each lost approximately 40,000 jobs, followed by the Eastern Cape with a decline of 15,000 jobs. Gauteng, which still holds the largest construction labour force in the country, lost 6,000 jobs in the quarter (a 1.8% decrease), bringing the total to 334,000. However, this remains 15% (or 43,000 jobs) higher than a year ago.

In the Western Cape, there was little change in the construction workforce since the end of 2024. Employment in the sector is now around 3% (or 7,000 jobs) higher year-on-year, with 245,000 people employed across both the formal and informal markets.

When compared to the first quarter of 2024, Gauteng recorded the strongest growth in construction employment, followed by the Free State and North West. Conversely, KwaZulu-Natal experienced the steepest decline, followed by Mpumalanga.

The post-election May 2024 slump in public sector building and civil contracts out to tender will inevitably have a negative impact on the construction pipeline, while the recovery in private sector demand for building construction has been modest and isolated to a few market segments and provinces. While we wait to see the impact of the release of Budget 3.0 scheduled for the 21st of May, it is not unlikely that the infrastructure allocations announced in the intital Budget exceeding R1 trillion may be revised lower.

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