Rise in unemployment as manufacturing sector sheds 105‚000 jobs

SA’s unemployment rate worsened to 27.2% in the second quarter‚ from 26.7% in the first quarter.
SA’s unemployment rate worsened to 27.2% in the second quarter‚ from 26.7% in the first quarter.
Image: Mujahid Safodien /AFP/Getty Images

SA’s unemployment rate worsened to 27.2% in the second quarter‚ from 26.7% in the first quarter‚ Statistics SA reported on Tuesday in its quarterly labour force survey.

Manufacturing lost 105‚000 jobs; community‚ social and personal services lost 93‚000; and trade lost 57‚000 jobs.

On the plus side‚ transport added 54‚000 jobs‚ construction added 45‚000 and mining added 38‚000.

While mining has taken strain‚ job increases were seen in nonferrous metal ores‚ gold and uranium ore. Statistician-general Risenga Maluleke said: "These are the areas that have observed gains. In other areas‚ strains would have been felt but the net effect was the increase of 38‚000 jobs."

The expanded unemployment rate‚ which includes discouraged work seekers‚ increased by 0.5 percentage points to 37.2%.

The number of discouraged work seekers increased to 2.9-million during this period while the working-age population increased by 154‚000.

The Free State suffered the largest increase in its unemployment rate‚ which grew by 1.6 percentage points‚ followed by Gauteng‚ at 1.1 percentage points‚ and the Western Cape‚ where unemployment rose by one percentage point.

The Eastern Cape has the highest unemployment rate‚ at 45.8%.

Youth employment‚ however‚ declined slightly — by 0.6 of a percentage point — to 31.6%. This bracket covers people between the ages of 15 and 24.

Reserve Bank governor Lesetja Kganyago said last week that the current economic growth trajectory remained too low to tackle SA’s unemployment levels.

The unemployment rate was 26.7% in the first quarter of 2018‚ after reaching a historical high of 27.7% in 2017 — but analysts did not expect this number to move significantly.

Unemployment has worsened significantly since the financial crisis‚ when it averaged between 23%-24%.

Weak growth‚ a slew of credit ratings and political uncertainty caused it to rise last year.

Economic growth in 2018 has already faltered‚ with a 2.2% contraction in the first quarter‚ which has led many institutions to lower their growth forecasts.

The Reserve Bank slashed its forecast from 1.7% to 1.2% earlier this month.

Investec had forecast unemployment to dip slightly to 26.5%.

Last week‚ Investec economist Lara Hodes said: "The subdued nature of economic growth implies that unemployment for the second quarter is likely to be similar to the first quarter’s result."

FNB chief economist Mamello Matikinca said it was difficult to see where job creation would come from‚ as she anticipated job losses in mining‚ manufacturing and agriculture.