South Africa’s official unemployment rate has pulled back slightly, falling to 32.6% of the labour force in the second quarter of 2023.
The retreat in the country’s ultra-high jobless rate comes after Statistics South Africa reported a modest rise in the first three months of the year, when the figure hit 32.9%. Despite a series of retreats in 2022 — and the economy recovering to levels before the Covid-19 pandemic — unemployment is still higher than it was at the beginning of 2020.
According to the StatsSA data, employment has been increasing since the fourth quarter of 2021, although job growth started to soften during the second half of 2022. The number of employed people increased by 154 000 to 16.3 million in the second quarter of 2023, bringing this number closer to the pre-pandemic 16.4 million.
The number of unemployed people is, however, substantially higher than it was prior to the pandemic. In the last decade, 1.8 million were added to the ranks of South Africa’s jobless which has climbed to 7.9 million — 77.3% of which are chronically unemployed.
Some analysts were expecting a slight fall in the unemployment rate, although they flagged continued constraints on job growth. Chief among these impediments is load-shedding, which has dampened the GDP growth outlook compared with the beginning of the year.
South Africa’s economy is only slightly bigger than it was prior to the pandemic, registering what some have described as a “stop-start” recovery since the second half of 2020.
That said, some analysts have raised — albeit only moderately — their GDP forecasts on the back of the economy’s resilience in the first half of the year.
Mining output in April and May, for example, was up 1.7% above the monthly average for the first quarter of 2023, Absa’s economists noted in their Quarterly Perspectives report.
The manufacturing sector’s average output in the second quarter was 2% above the first quarter. “Absent any major adverse revisions to the historical data and/or an unusually large drop in output in June, these two sectors appear to have added to GDP growth in Q2 23,” the Absa economists noted.
Absa’s stronger GDP growth predictions come with the caveat that the country’s economic outlook “remains subdued and clouded with uncertainty”, especially on the electricity front.
Despite improved manufacturing output, the sector recorded the largest decline in employment, according to Tuesday’s StatsSA data.