/ 29 October 2019

SA unemployment soars to 11-year high

About three million people aged 15 to 24 remain vulnerable in the labour market and are not in employment
(Delwyn Verasamy/M&G)



South Africa’s ailing economy continues to shed jobs, causing the unemployment rate to climb to its highest level since 2008, according to the latest unemployment figures released by Statistics SA.

The Quarterly Labour Force Survey released on Tuesday shows that the working age population (15 to 65) is 38.6-million people of which 16.4-million are employed and 6.7-million people are unemployed. This shows an increase of 0,1 percentage point to 29,1% in the third quarter of 2019, compared with the second quarter of this year.

The unemployment rate remains unchanged at 38,5% between the second and third quarters of this year.

The number of discouraged work-seekers increased by 44 000 while the number of people who were not economically active for other reasons decreased by 35 000 in the same period.

About three million people aged 15 to 24 remain vulnerable in the labour market and are not in employment, education or training, “which reflects the inability of our education system to develop the skills needed by the jobs sector”, said Maarten Ackerman, chief economist and advisory partner at Citadel.

“As a result, those people who already have jobs tend to keep them, while new entrants without work experience or who don’t have the appropriate skills needed by the economy are prevented from joining the workforce,” he added.

There was an increase of 141 000 (up by 0,6%) in the number of people in the labour force, according to the Quarterly Labour Force Survey.

Formal sector employment increased by 43 000, agriculture increased by 38 000 and private household increased by 35 000 while the informal sector shed 53 000 job during this period.

Statistician general Risenga Maluleke said the largest unemployment increases were recorded in manufacturing (30 000), construction (24 000), trade ( 21 000) and utilities (18 000).

PwC economist Christie Viljoen said the initiatives announced by President Cyril Ramaphosa at last year’s jobs and investment summits have not yet dented the rising unemployment figures in the country. Apart from creating policy certainty, Viljoen suggests that government should implement structural reforms to lift business confidence.

“Business confidence was measured at a 20-year low in the third quarter. If you have business confidence that low then you are not likely to create more jobs. We need policy certainty on several different fronts before business confidence can improve and before those companies can start employing more people,” he said.