The Eastern Cape’s unemployment rate took another knock in the last quarter, A FEW thousand lucky job seekers EMPLOYMENT gains made in the last quarter did not help the Eastern Cape or the country.
The latest Quarterly Labour Force Survey (QLFS), released yesterday by Statistics South Africa (StatsSA), showed that despite 51000 people securing jobs in the last quarter nationally, the Eastern Cape’s official unemployment rate has increased 0.4 percentage points from 29.8% to 30.2%.
The national unemployment rate rose 2.2 percentage points to 25.2% during the same period.
The province’s expanded unemployment rate, which includes people who are not actively looking for jobs, stands at 45.8% according to the QLFS, a household-based sample survey conducted by StatsSA covering people aged 15 to 64.
The number of discouraged work seekers grew by 73000 to 2.3-million nationally between the fourth quarter (Q4) of 2012 and Q1 of 2013.
Although Q1 2013 is a far cry from the dip of 69000 jobs in Q4 2012, economist Dawie Roodt said the province failed to create jobs fast enough to meet the increasing number of job seekers, a trend reflected nationally.
“It means more people are looking for jobs than the labour market is able to supply. Officially if you are not looking for a job you are not considered as unemployed.
“If more people come into the job market, then the unemployment rate increases,” said Roodt.
Compounding the problem in the Eastern Cape and the country as a whole are big job loss es in manufacturing and trade, which Roodt said could indicate that investors were shying away from South Africa in favour of for the Far East due to high labour costs.
Although the QLFS offered no details of sector employment by province, the manufacturing and trade sectors together lost a total of 179000 jobs nationally when compared to the same quarter last year.
The trade and manufacturing industries employ around 20% and 16% respectively, StatsSA said.
“The manufacturing and trade sectors are those that we should be very concerned about because we need them to create sustainable jobs,” said Roodt.
“They are losing jobs and the problem could be that labour in South Africa is too expensive and unproductive, so we are losing investors and jobs to places like China.”
Eastern Cape Socio-Economic Consultative Council (Ecsecc) chief executive Andrew Murray said government needed more drastic measures to increase agriculture and manufacturing, which are capable of large-scale employment.
“We must accept that we have structural unemployment because of very deep seated in structure of the economy. We need to be doing much more to address those structural constraints. We can look at that in number of years, The Eastern Cape has consistently lost jobs in manufacturing due to the deindustrialisation outside of the automotive sector.
“Manufacturing enterprises without support have battled to remain competitive against competition from China, India and Bangladesh. Input costs have been rising.”
Murray said there were programmes in the National Growth Path and others government programmes designed to assist industry.
Ecsecc is mandated to advise government onto achieve an integrated development strategy for the Eastern Cape and its constituent regions in order to address socio-economic development.
“Farmers are battling and I am not saying we need protectionist measures, but we need to provide more support.”
Economic development MEC Mcebisi Jonas could not be reached for comment.
East London-based development economist Philip Cole said the in crease in jobs in the construction sector was due to government infrastructure projects.
“The construction sector jobs must be a reflection of state emphasis on infra structure which is very promising.”
The Eastern Cape relies mainly on the manufacturing sector for jobs, with the automotive sector as the main employer outside of government.
Border-Kei Chamber of Business executive director Les Holbrook was hopeful that increasing vehicle sales in April could boost employment, but said he was not surprised by the rise in unemployment.
Holbrook said the figure of 51000 jobs created did not reflect what was happening in companies.
“We have not seen much job creation from the business side. I am not surprised unemployment is getting worse in the Eastern Cape.
“We take much longer and later than most other provinces to come out of a downward spiral unfortunately because we have a large rural base that does not contribute much to the economy,” said Holbrook.
The South African economy lost approximately a million jobs during the recession.
Nationally, the biggest contributor to the increase in employment was the agricultural sector at 54000 jobs, followed by the community and social services with 44000.
The retail and wholesale trade sector lost 66000 jobs between Q4 2012 and Q1 2013. — / Additional reporting by Sapa