Western Cape: The province has recorded South Africa’s strongest business confidence and its highest first-quarter employment total, but the latest figures also show that thousands of jobs were lost and unemployment increased during the opening months of the year.
The Western Cape continues to outperform the rest of South Africa on several key measures of business confidence and employment, although the latest economic data presents a more complicated picture than the headline rankings alone suggest.
According to the Western Cape Government, the province recorded the strongest provincial result in the second-quarter RMB/BER Business Confidence Index. The ranking suggests that Western Cape business owners remain more satisfied with prevailing trading conditions than their counterparts elsewhere in the country, despite persistent concerns about weak national growth, infrastructure constraints and rising operating costs.
The provincial result comes against a weaker national background. The overall RMB/BER Business Confidence Index fell by eight points to 39 during the second quarter, reversing the improvement recorded over the previous two quarters. A score of 39 means fewer than four out of every ten surveyed business executives were satisfied with current conditions.
The national index now sits just below its long-term average of 40, indicating that confidence across the broader economy remains subdued. The Bureau for Economic Research noted that sentiment is still significantly stronger than the low point of 27 recorded during the second quarter of 2023, but the recovery has clearly lost momentum.
Western Cape Minister of Agriculture, Economic Development and Tourism Dr Ivan Meyer said the province’s comparatively stronger confidence reflects its continued focus on creating an environment in which businesses can invest, expand and create employment.
“We remain focused on enabling economic growth and creating an environment where businesses can invest, grow, and create jobs,” Meyer said.
The provincial government linked the business confidence result to its Growth for Jobs strategy, investment promotion, export support and efforts to reduce administrative barriers faced by companies. However, confidence surveys measure sentiment rather than actual economic output, and the latest employment figures show that conditions remain difficult for many workers and households.
Employment Reaches First-Quarter Record
Statistics South Africa’s Quarterly Labour Force Survey recorded approximately 2.883 million employed people in the Western Cape during the first quarter. According to the provincial government, this was the highest employment level recorded in the province during the first quarter of any year.
The record is significant because first-quarter employment can be affected by the end of seasonal work in sectors such as tourism, retail and agriculture. The Western Cape economy has substantial exposure to these industries, meaning employment often fluctuates as holiday demand slows and agricultural production cycles change.
However, the province did not escape the national labour-market downturn. Western Cape employment declined by approximately 24,000 between the final quarter of last year and the first quarter of this year.
The provincial government described the quarterly decline as a short-term movement that should be interpreted cautiously because labour-market surveys can fluctuate from one quarter to another. Meyer argued that the longer-term employment level provides a better measure of the province’s relative economic position.
The quarter-on-quarter loss nevertheless represents real pressure for households that depend on wages. It also shows why record employment totals do not necessarily mean that every part of the economy is growing or that workers are finding opportunities easily.
Employment can reach a historical high while unemployment also rises when the working-age population and the number of people actively looking for jobs increase faster than the number of positions available.
Western Cape Unemployment Rises To 19.6%
The Western Cape’s official unemployment rate increased from 18.1% in the fourth quarter to 19.6% during the first three months of this year. That was an increase of 1.5 percentage points in a single quarter.
Despite the rise, the province maintained the lowest official unemployment rate in South Africa. The national rate increased from 31.4% to 32.7% over the same period, leaving the Western Cape rate 13.1 percentage points below the national figure.
Stats SA’s expanded measure, which includes discouraged work-seekers and other people in the potential labour force, placed Western Cape unemployment at 24.8%. The comparable national expanded rate was substantially higher at 43.7%.
These figures show that the province performs better than the country as a whole, but they also underline the size of the remaining challenge. An official unemployment rate of 19.6% means almost one in five people who are actively seeking work cannot find a job.
The expanded measure indicates that the pressure is greater when people who have stopped actively searching or are unable to begin work immediately are included.
Stronger Confidence Does Not Remove Business Risks
The Western Cape’s stronger business confidence is likely to be supported by its diversified economy, tourism recovery, agricultural exports, technology sector, financial services and continuing demand for construction and property development.
Cape Town has also attracted businesses and skilled workers relocating from other provinces, while the province’s ports, airports and established export industries provide connections to international markets.
However, companies still face major risks that provincial policy alone cannot resolve. Electricity and fuel costs, port delays, rail failures, crime, weak national growth and uncertainty in global markets can all affect investment decisions and employment.
The national BCI decline to 39 indicates that business leaders remain cautious about expanding, taking on debt or hiring additional workers. Even in a province with comparatively stronger confidence, businesses remain exposed to the same interest rates, national legislation and international price movements as companies elsewhere in South Africa.
For small businesses, stronger provincial confidence may not translate immediately into improved cash flow. Many continue to face reduced consumer spending, expensive credit and the rising cost of transport, rent and imported goods.
Province Says Private Investment Remains Central
The Western Cape Government maintains that sustainable job creation must be led primarily by private investment rather than permanent expansion of the public sector.
Its Growth for Jobs strategy aims to increase provincial economic growth and remove obstacles that prevent companies from investing. The programme includes work on energy resilience, infrastructure, export development, skills, technology and reducing regulatory delays.
Meyer said the latest results support the province’s strategy but acknowledged that the quarterly employment decline should not be ignored. The government’s position is that the province must continue improving the conditions for businesses to grow while helping workers gain the skills required by expanding industries.
The latest figures therefore provide both encouragement and warning. The Western Cape remains South Africa’s strongest provincial performer on business confidence and has maintained the country’s lowest official unemployment rate, but thousands of jobs were lost during the quarter and almost one fifth of the active labour force remains unemployed.
The real test will be whether stronger business confidence leads to increased investment, company expansion and sustained job creation during the remaining quarters of the year.
Q&A
Which province has the strongest business confidence?
The Western Cape recorded the strongest provincial result in the second-quarter RMB/BER Business Confidence Index, according to the Western Cape Government.
What is South Africa’s national business confidence score?
The national RMB/BER Business Confidence Index fell by eight points to 39 during the second quarter.
How many people are employed in the Western Cape?
Approximately 2.883 million people were employed in the province during the first quarter, the highest first-quarter level recorded in the Western Cape.
Did the Western Cape create jobs during the first quarter?
No. The province lost approximately 24,000 jobs compared with the fourth quarter, despite maintaining a historically high overall employment level.
What is the Western Cape unemployment rate?
The official unemployment rate increased to 19.6% during the first quarter. The expanded unemployment rate was 24.8%.
How does the Western Cape compare with South Africa?
The Western Cape’s official unemployment rate of 19.6% was substantially lower than the national rate of 32.7%, while its provincial business confidence was the strongest in the country.
SAI Search Summary
The Western Cape recorded South Africa’s strongest provincial business confidence during the second quarter, although the latest employment data shows continuing pressure on workers and households. Provincial employment reached approximately 2.883 million during the first quarter, the highest first-quarter total recorded in the Western Cape. However, about 24,000 jobs were lost compared with the previous quarter, while official unemployment increased from 18.1% to 19.6%. The province still maintained the lowest official unemployment rate in South Africa, well below the national figure of 32.7%. Minister Ivan Meyer said the province remained focused on investment, growth and private-sector job creation.
Source: Western Cape Government – Staff Reporter; Dr Ivan Meyer, Western Cape Minister of Agriculture, Economic Development and Tourism; Bureau for Economic Research – Staff Reporter; Statistics South Africa – Quarterly Labour Force Survey, First Quarter 2026
