Sunday, January 16

SA’s unemployment rate rises to a new record in the third quarter

South Africa’s unemployment rate rose to a new record in the third quarter as all sectors except finance lost jobs.

The unemployment rate rose to 34.9%, from 34.4% in the three months to June, South African Statistics said in a report published in the capital Pretoria on Tuesday. That’s the highest on a global list of 82 countries monitored by Bloomberg, although data for some of those nations is out of date. The median of estimates from 23 economists in a Bloomberg survey was 34%.

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Unemployment under the expanded definition, which includes people who were available for work but were not looking for work, rose to 46.6% from 44.4% in the second quarter.

Industries that eliminated the most jobs included commerce, community, and social services. The job losses were partly due to tighter lockdown measures to curb the spread of a third wave of Covid-19 infections, a security breach at the state port operator that hampered trade and deadly riots in KwaZulu. -Natal and Gauteng Mall: the two largest provinces by contribution to gross domestic product.

The July riots saw thousands of businesses looted and closed and cost the country around R50 billion ($ 3.1 billion) in lost production, according to the South African Property Owners Association. They probably also contributed to an economic contraction in the third quarter that is being forecast by the Finance Ministry and the central bank.

A three-week steel and engineering industry strike, the resumption of continuous blackouts and the emergence of a new variant of the coronavirus that led several nations to ban travel to and from the country just before the holiday season of summer, growth is expected to slow in the fourth year. room. That would further derail South Africa’s recovery from its worst contraction in nearly three decades and lead to further job losses in the last quarter.

Rising unemployment could pressure authorities to extend relief measures that would complicate efforts to restrict public spending and meet their fiscal targets. You could also see the state expanding its labor initiatives. The nation set aside rand 11 billion in its 2021 budget to support the creation of more than 440,000 short-term jobs through March.

The unemployment rate in Africa’s most industrialized economy has exceeded 20% for at least two decades, despite the fact that production expanded by 5% or more per year in the early 2000s. The International Monetary Fund projects that the rate will reach 38.6% in 2026. That is likely to have negative repercussions for the most unequal society in the world.

Strict labor laws and skills shortages reduce the ability of South African companies to hire new workers. The apartheid-era strategy of placing so-called municipalities, where many black citizens were forced to live, on the outskirts of cities also makes it difficult for residents to access the formal labor market.

Key figures:

  • The financial industry added 138,000 jobs
  • The community, social services lost 210,000 jobs
  • The commerce industry lost 309,000 jobs
  • Mining lost 54,000 jobs
  • Construction lost 65,000 jobs
  • Agriculture lost 32,000 jobs

© 2021 Bloomberg

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