Employment rates in the public sector increased by 4.6%
In the latest "Annual Economic Report" released by the Reserve Bank this week, which includes data up to March this year, employment rates in the public sector increased by 4.6%, the "highest rate of growth since 1975". The report describes this as a "countercyclical" move to stimulate growth and investment in the economy.
The private sector increased employment at a rate of 1.4% in 2011, with all sectors except manufacturing and gold-mining reporting employment gains. Despite this, South Africa's official unemployment rate rose from 21.8% at the end of 2008 to 25.2% in the first quarter of this year.
<strong>Complications</strong>
The household-based Quarterly Labour Force Survey conducted by Statistics South Africa, which is also cited in the report, highlighted the added complications of unskilled labour and new job-seekers. According to the report, an estimated 1052000 jobs were lost between the last quarter of 2008 and the third quarter of 2010. By March this year, only 448000 of these jobs had been regained. According to the survey, the number of unsuccessful job-seekers increased by 240000 between 2010 and 2011.
The unemployment rate parallels the Reserve Bank's description of "the continued existence of surplus capacity in most sectors of the economy". Significantly, real value added to the economy by the manufacturing sector dropped from 5.4% in 2010 to 2.4% in 2011. Capacity utilisation in this sector hovered at about 80% in 2010 and 2011, more than 6% below its peak of 86.3% in 2007.
IPAP2, the government's industrial policy action plan, launched in April 2011, included a R5.8-billion grant and loan programme aimed at stimulating employment in the manufacturing sector by 2014.
Capital formation would continue to lag while South Africa continued to operate at levels "significantly below potential", the bank reported.