Unemployment rate drops as government hires workers
South Africa's unemployment rate, which is the highest of more than 40 emerging markets tracked by Bloomberg, fell last quarter to 24.1% as the government hired workers and the jobs in the informal industry rose.
The rate declined from a revised 24.5% in the previous three months, Statistics South Africa said in a report released on Tuesday in Pretoria. The median estimate in a Bloomberg survey of six economists was 24.9%.
The number of people without jobs fell by 50 000 to 4.8-million, while employment increased by 141 000. South Africa's economy has lost jobs since last year as strikes in mining and manufacturing and a slump in global demand crimped exports. The ruling ANC, which will contest its fifth election in May, has pledged to create six-million jobs over the next five years.
"Public sector employment has accounted for more than a third of the total jobs created over the past year and, in our view, continues to mask the underlying weakness in the private sector labour market," Jeffrey Schultz, an economist at BNP Paribas in Johannesburg, said in an emailed note to clients.
Employment in community and social services industries, which comprises mainly of government jobs, increased by 97 000 last quarter from the previous three months, while the retail and wholesale trade industries added 40 000 jobs, the statistics agency said. The construction industry boosted employment by 59 000.
"Most of the jobs gained were short-term contractual agreements suggesting they may be temporary in nature," the statistics office said. The unemployment rate is compiled from a household survey covering the formal and informal industries. Africa's biggest economy is set to expand 2.8% this year compared with 1.9% in 2013, according to the reserve bank, which last month raised its benchmark repurchase rate for the first time since June 2008 to 5.5%.
The biggest job losses came from the financial services industry, which fell by 23 000, and agriculture, which declined by 27 000. Manufacturing, which makes up about 15% of the economy, shed 12 000 jobs in the quarter.
In a separate statement, the statistics agency said manufacturing output rose 2.5% in December from a year earlier, compared with 0.3% growth in November. For the year as a whole, production slowed to 1.3% in 2013 from 2.4% in the previous year.
The rand gained 1.2% against the dollar to 11.0028 as of 1.46pm in Johannesburg on Tuesday, paring its decline this year to 4.7%. – Bloomberg