By Thanda Sithole
The Quarterly Labour Force Survey (QLFS), a household-based employment survey (not seasonally adjusted), recorded a material quarter-on-quarter (q/q) decline of 344 626 in total employment in 1Q26, bringing employment back to 16 754 282, following an increase of 44 085 in the final quarter of 2025 (Figure 1).
At 16 754 282, total employment was 32 985 lower than in the corresponding quarter last year, reflecting a deterioration in labour market conditions.
People outside the labour force amounted to 17 297 955 in 1Q26, representing a further net quarterly increase of 164 163, as discouraged work-seekers continued to rise.
Formal sector (including formal agriculture) employment declined the most, falling by 189 228 to 12 113 499. Meanwhile, informal sector employment declined by 127 360 to 3 539 986, while household sector employment fell by 28 039 to 1 100 797 individuals.
The level of unemployment increased by 300 964 to 8 136 687 in 1Q26, while the labour force (the denominator in the calculation of the unemployment rate) declined modestly by 43 662, resulting in the official unemployment rate rising to 32.7% from 31.4% in 4Q25. The degree of unmet need for employment among the working-age population remains considerable, with the expanded unemployment rate (i.e., the combined rate of unemployment and potential labour force) increasing to 43.7% from 42.1%, as the number of people outside the labour force (i.e., those economically inactive, including discouraged individuals) continued to rise, reflecting lost productivity.
Industry employment insights:
The decline in quarterly employment was broad-based, with seven out of ten sectors recording net job losses (Figure 2).
Outlook
Elevated levels of unemployment remain a critical challenge and could be exacerbated by the prevailing Middle East turmoil, which is likely to complicate consumption and production conditions as prices rise. Our below-consensus muted GDP growth forecast of 1.1% this year suggests that employment creation will remain constrained. However, while the near-term outlook remains challenging, cyclical employment conditions may be supported by ongoing structural reforms, which are expected to improve the structural health of the economy, enhance competitiveness and boost investment and employment over time.
