Concerns have been expressed recently about the inability of the South African economy to
provide adequate employment for the increasing number of job seekers. The rate of
unemployment remains stubbornly high in spite of vastly improved macroeconomic
fundamentals since the 1990s. South Africa registered positive average growth rates of 4.9
per cent in 2005-2008 and 1.7 per cent in 2009-2011. However despite these growth rates
employment has not increased significantly. This paper investigates how the sectoral
employment intensity of output growth in the eight non-agricultural sectors of the South
African economy has evolved in the period 2000:01-2012:04, with a view to identify key
growth sectors that are employment intensive. To achieve this, the study evaluates the
employment elasticities in the major SIC divisions of the economy to establish whether
growth is employment intensive in these sectors. Empirical findings of the study suggest that
employment and economic growth do not move together in the long run, implying that
jobless growth did occur in South Africa during the period under review. This supports the
view that South Africa has become less labour intensive and more capital intensive, and in
turn facilitated a structural adjustment that has led to the weakening employment-growth
relationship. Results of a sectoral division confirm a long run relationship between
employment and growth in finance and business services, manufacturing, transport and the
utilities sectors. In particular, the results suggest that sectors within the tertiary sector are
best performing sectors, in terms of employment intensity of output growth, reflecting the
changing structure of the economy and the nature of employment shifting away from primary
towards the tertiary sector. Investment in the tertiary sector is necessary to foster new
employment opportunities and can assist in improving the overall employment intensity in
South Africa.