JOHANNESBURG – The country’s unemployment rate in the formal non-agricultural sector accelerated past the 10 million mark in the first quarter.
Data from Statistics South Africa (StatsSA) yesterday showed that the formal non-agricultural sector shed 3000 jobs during the period, and there are indications that the situation will deteriorate even further as Covid-19 continues to wreak havoc across the economy.
StatsSA said employment plunged to 10.2 million quarter-on-quarter as conditions in the labour market remained sluggish. The statistics agency said the decline was largely due to decreases in the trade, construction and manufacturing industries.
It said the manufacturing sector recorded an annual decrease of 28000 employees, compared with a similar period last year and a quarterly decrease of 2000 employees from December 2019.
The Steel and Engineering Industries Federation of Southern Africa (Seifsa) said the contraction reflected the general decline in activity as the recession deepened, with businesses struggling to absorb negative shocks from the distortion of local, regional and global supply chains.
Seifsa economist Marique Kruger said the broader manufacturing sector lost 2000 jobs during the period and 28000 since the first quarter of 2019.
“Evidently, businesses continue to suffer from the unintended consequences of the Covid-19-induced economic lockdown, as reflected in the number of jobs lost,” Kruger said.
StatsSA said job losses were mainly due to decreases in employment in the retail and wholesale trade sub-industries as the recession deepened.
It said the Quarterly Employment Statistics (QES) survey was, however, not indicative of the impact on employment due to the Covid-19 pandemic as it looked at the period ending in March.
The QES survey showed community services, business services, mining, and transport recorded moderate lifts in employment during the quarter, while employment in the electricity industry remained unchanged.
The community, social and personal services industry reported an annual growth of 54000 employees in March 2020 and an increase of 17000 employees between the quarters ending December 2019 and March 2020.
On a year-to-year basis, total employment increased by 3000 between March 2019 and March 2020.
Investec economist Lara Hodes said Covid-19 added to an already grim picture, as South Africa had one of the highest unemployment rates in the world.
The general unemployment rate increased to 30.1 percent in the first quarter of 2020 after the number of employed persons decreased by 38000 to 16.4 million in the three months to March.
Hodes said weak economic growth, underpinned by structural inefficiencies and policy uncertainty, was driving the country’s mounting unemployment crisis.
“However, the pandemic has served to exacerbate the dire domestic unemployment predicament significantly as business closures and cutbacks accelerate,” Hodes said.
“The hastened implementation of reformative interventions are essential to generate a faster growing, more labour-intensive economy.”