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Q1 unemployment rate increases to 25.2%

6th May 2013

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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South Africa’s unemployment rate has risen from 24.9% in the last quarter of 2012 to 25.2% in the first quarter of this year, Statistics South Africa (Stats SA) reported on Monday in its latest Quarterly Labour Force Survey.

This translated into an increase of 100 000 in the number of unemployed people, bringing the total number of unemployed individuals in the working age population to 4.6-million.

The number of discouraged work seekers simultaneously increased by 73 000 over the period to 2.3-million, as both the formal and informal sectors shed jobs over the quarter, with employment in the former down by 25 000 and in the latter by 13 000.

The Nedbank Economic Unit said the increase in the unemployment rate added to other evidence that the local economy was struggling to pick up, adding that the South African Reserve Bank would likely continue striking a balance between the weak economy and upside risk to the inflation outlook by keeping rates steady this year and well into 2014.

It observed that the highest number of jobs were lost in the trade industry, which shed 66 000 jobs, the construction industry, which was down some 41 000 jobs, and the financial industries, which lost 23 000 jobs.

“Surprisingly, the export-sensitive mining and manufacturing sectors created jobs over the quarter, with employment in the two sectors rising by 8 000 and 23 000 respectively,” commented Nedbank.

Employment in the agricultural sector also rose over the quarter, growing by 54 000, while government added 44 000 jobs, which the South African Chamber of Commerce and Industry (Sacci) said was problematic.

“Government has replaced the trade sector, which contracted by 66 000 [jobs] over the same period, as the single biggest employer in South Africa. This is clearly unsustainable, as the public sector wage bill is ultimately paid for by the taxes generated by the private sector,” the chamber asserted.

Further, Sacci was concerned about the 36.7% expanded unemployment rate recorded for the first quarter of 2013.

“This, in itself, serves as powerful warning that the current culture of knee-jerk industrial action and the increased rigidity of labour regulations stifles employment creation and, in turn, threatens the stability of the economy,” it said.

The report further outlined that 65.3% of the unemployed had been looking for work for a period of one year or longer, while 59.4% of job seekers did not have matric.

At 52.9%, the unemployment rate among those aged between 15 and 24 remained the highest among all age groups and was on the increase.

Those aged between 15 and 34 accounted for 70.7% of all unemployed persons.

Nedbank said the unemployment rate was likely to remain high in the short term as firms remained cautious of expanding capacity and employing more people during the current challenging economic and labour environment.

Employment would, however, most likely be driven by the public sector as the infrastructure programme was rolled out.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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