South Africa is experiencing jobless growth, with the country now topping the global charts for both aggregate unemployment, as well as youth unemployment, PwC Strategy&’s ‘SA Economic Outlook 2022’ report states.

The document reports on PwC South Africa’s core macroeconomic forecasts for the country as of January 24, based on different forward-looking scenarios.

The projections are updated on a monthly basis, although revisions could occur more frequently owing to major economic data releases or key influential events.

Statistics South Africa (Stats SA) recorded the liquidation of 982 companies and 828 close corporations during the first 11 months of 2021.

This added to 2 035 liquidations in 2020.

The closure of companies, owing to the pandemic, load-shedding and other factors, and the scaling down of activities by others have had a big negative impact on South Africa’s employment over the past two years, the report finds.

Moreover, following the week-long unrest in July 2021, and the adverse impact this had on economic activity and physical infrastructure, Gauteng and KwaZulu-Natal lost a combined 323 000 jobs during the third quarter of 2021.

This contributed to a total loss of 660 000 employment opportunities in that quarter.

This, in turn, reduced total formal and informal employment to 14.28-million – similar to levels seen in 2012.

Total employment is almost back to lockdown Level 5 levels after 742 000 jobs were lost from the first to the third quarter of 2021, the report highlights.

The report indicates that the loss of semiskilled services employment has contributed to the jobless growth trend.

Semiskilled employment is nearly 19% lower compared with before the Covid-19 pandemic.

Semiskilled jobs include aggregates for sale staff, craft and related trades, clerks, plant and machine operators, as well as skilled agricultural workers.

The biggest number of jobs lost is in the category for sales and services. This group includes, among others, jobs like travel attendants, restaurant service workers, shop salespersons and demonstrators.

The report notes that it is understandable how these jobs have declined over the past two years given how Covid-19 – and the July 2021 unrest – has impacted the retail and hospitality sectors.

The report emphasises that small, medium-sized and microenterprises need to drive job creation in the country. However, it points out that being an entrepreneur in South Africa is challenging.

PwC’s research reiterates that South Africa has a poor business environment for private businesses and entrepreneurs.

The report posits that, with 11.5-million unemployed and discouraged adults in South Africa, it would be highly beneficial for the country to have a business environment that is supportive of entrepreneurs.

Based on the latest international research findings, South Africa underperforms in creating an environment for entrepreneurship.

Moreover, the weak environmental and health indicators for the country contribute to its challenging business environment.

Meanwhile, the report finds that household spending increased in 2021 as consumers’ outlook for their finances continues to recover.

The outlook for household finances returned to pre-pandemic levels as monetary policy and the Temporary Employer/Employee Relief Schemes supported sentiment.

Real disposable income is expected to grow by 2.6% this year alongside 2.6% real gross domestic product growth.

The report states that the post-lockdown economy is almost here.

The fact that December closed – and January has continued – with no increase in lockdown rules, suggests that South Africa entered this year en route to a new post-lockdown era, the report notes.

In this paradigm, Covid-19 has moved from being a pandemic to being endemic.

Therefore, the report states that it is highly unlikely that the economy will again see significant lockdown restrictions.

The report says the post-lockdown economy’s key pandemic-related challenge is no longer domestic policies but those abroad.

At present, 100 countries still have total travel bans in place against South Africa, with another 123 applying specific restrictions like quarantines upon arrival, it points out.

The report also highlights the rising cost of living in the country.

Headline inflation reached 5.9% year-on-year in December as the petrol price jumped by more than 40% year-on-year.

It points out that government is looking at options to lower the cost of fuel to consumers, with the upcoming Budget speech hopefully providing some clarity.

The report also indicates that the South African Reserve Bank Monetary Policy Committee will increase interest rates several times this year, and again in 2023 to 2024.

Currently, the report says the country is progressing in getting economic activity back to pre-pandemic levels.