South Africa


SA’s unemployment rate dips to 31.9%, mining and manufacturing job losses bode ill

SA’s unemployment rate dips to 31.9%, mining and manufacturing job losses bode ill
Job losses in construction and agriculture sectors have offset gains in mining in South Africa. (Image: Rawpixel)

South Africa’s unemployment rate fell slightly in the third quarter (Q3) of this year to 31.9% from 32.6%, Stats SA said on Tuesday in its Quarterly Labour Force Survey. In a worrying sign, mining and manufacturing shed jobs, and more job losses are seen in both sectors as the prices of key commodities tank and the global economy remains in low gear.

At 31.9%, South Africa’s unemployment rate remains a shocker and global chart-topper, while the prospects for significant job creation remain dim in an economy that may be in the throes of a contraction.

The finance sector, perhaps surprisingly, added 237,000 jobs in the quarter, according to the Quarterly Labour Force Survey (QLFS), a 9.1% increase from Q2. Community and social services added 119,000 jobs and agriculture 61,000. 

The labour-intensive construction sector saw an additional 53,000 jobs, which could partly be linked to the surge in solar panel installations. 

But employment in mining and manufacturing – the productive engine rooms of the economy – declined. This is a likely consequence of the contraction in output which preliminary data suggests occurred in both sectors during the quarter. 

Stats SA said last week that mining production fell 1% in the three months to the end of September, and manufacturing output by 1.2% over the same period. 

This suggests that gross domestic product (GDP) may have shrunk in Q3. 

Read more on Daily Maverick: Dismal September mining and manufacturing data bode ill for South Africa’s third-quarter GDP

More job losses are on the horizon in the mining sector as prices for key commodities such as platinum group metals render many shafts unprofitable. 

Read more on Daily Maverick: ‘We can’t be blind to the market’ — Northam CEO paints bleak PGM picture 

Meanwhile, the outlook for the manufacturing sector is poor. The Absa Purchasing Managers’ Index remained mired in negative territory below 50 in October, signalling a rough start to Q4. 

Still, the QLFS data offers some cautious encouragement. The number of discouraged jobseekers declined by 26,000 or 0.8% in Q3. 

Nedbank said in a note on the data that this probably reflected “some improvement in power disruptions and lower transport costs, which likely encouraged the discouraged to search more actively for work”.

The unemployment rate measured by the expanded definition, which includes discouraged jobseekers, fell by 0.9 of a percentage point to 41.2% – still an eye-popping number. 

“Total employment recovered to the pre-pandemic level, exceeding Q4 2019’s level by 325,000 jobs. This suggests that the labour market has now normalised from the severe shocks caused by hard lockdown in 2020,” Nedbank noted in its commentary. 

“However, the unemployment rate is still higher than the pre-crisis rate of around 30% because labour force growth continues to outpace job creation.”

That gets to the heart of the matter – this slow-growth economy is simply not generating enough jobs to absorb the incoming waves of new entrants into the labour market. 

Regional disparities remain glaring. 

At 20.2%, the Western Cape still has by far the lowest unemployment rate among provinces. (Only in South Africa could an unemployment rate of over 20% put you on the podium.) 

North West had the highest provincial unemployment rate at 38.6%, a figure that reaches 51.2% under the expanded definition. 

It all adds up to still unacceptable – indeed, heartbreaking – levels of poverty and inequality. DM


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