UNEMPLOYMENT in South Africa could continue trending towards record highs if the country’s economy fails to break out of its ‘low growth trap’, even as the jobless rate has started to ease.
The official unemployment rate in South Africa eased by 0.8 of a percentage point to 34.5 percent in the first quarter of 2022, down from a record high of 35.3 percent in the fourth quarter of 2021.
But it was still higher than the 32.6 percent recorded in the first quarter of 2021.
Data from Statistics South Africa (StatsSA) yesterday showed that the number of unemployed persons fell by 60 000 to 7.9 million in the first quarter of 2022.
StatsSA said 370 000 jobs were created between the two quarters, mainly in the community and social services, manufacturing and trade industries, rising employment to 14.9 million.
Statistician-General Risenga Maluleka said although there was a slight decline in the number of unemployed youth in the first quarter, the youth remained vulnerable in the labour market.
“Generally, in the country we have10.2 million young people aged between15 and 24 years, of those 3.8 million are not in employment, education or training. They wake up every morning and sit,” Maluleke said.
“Women, more especially black African women, remain vulnerable to the labour market because their unemployment rate is sitting at 40.6 percent and when you look at the overall unemployment rate, which is at 34.5 percent, they are some few percentage points higher.”
StatsSA said the number of discouraged work seekers fell by 54 000, or 1.4 percent, and the number of people who were not economically active for reasons other than discouragement, decreased by 112 000 between the two quarters.
This resulted in a net decrease of 166 000 in the ‘not economically active’ population.
Nedbank economist Johannes Khosa said the annual numbers showed that the economy had not yet recovered enough to support a significant increase in employment creation.
Khosa said the outlook for the job market remained uncertain even though the economy had started the year positively, with corporate profitability recovering.
“However, the recovery is now threatened by concerns about global stagflation, the dilemma of high interest rates, slow economic growth, and high unemployment,” Khosa said.
“Conditions in the sectors that supply the export market are likely to remain subdued as global demand will be restrained by the slowdown in China’s economic growth, the impact of the Russia-Ukraine war, and tighter monetary policy.”
The unemployment rate according to the expanded definition of unemployment also decreased by 0.7 of a percentage point to 45.5 percent in the same period.
North-West University Business School economist, Professor Raymond Parsons said it was not yet clear, however, whether the latest improvement in the employment situation would be sustained in the months ahead, given the renewed negative global and domestic economic trends.
Parsons said the latest unemployment figures again confirmed that South Africa needed economic growth rates of 3-4 percent to make a serious dent on unemployment levels.
“South Africa’s jobless rate is nevertheless still among the highest in the world. The massive youth unemployment in SA also remains a big challenge and highlights the scale of what job-creating measures are needed to remedy the situation,” he said.
“South Africa, therefore, needs to break out of its ‘low growth trap’ by collectively expediting the urgent implementation of key economic reforms.”
BUSINESS REPORT