Unemployment declines to 24.5% in 4th quarter

Thursday, February 25, 2016

Pretoria - South Africa’s unemployment rate declined by 1% to reach 24.5% in the fourth quarter of 2015, Statistics South Africa (Stats SA) said on Thursday.

Unemployment was at 25.5% in the third quarter.

Briefing reporters at the release of the Quarterly Labour Force Survey (QLFS), Statistician General Pali Lehohla said employment grew by 190 000 people in the fourth quarter, followed by a decline in the number of unemployed persons by 225 000.

The results of the QLFS showed that South Africa’s working age population was at 36.3 million. Sixteen million are employed, 5.2 million are unemployed while 15.1 million are not economically active.

The National Development Plan (NDP) targets employment at 24 million people. The absorption rate in quarter four is at 44.2%, with the highest absorption rate seen in the Western Cape at 55.1% and the lowest seen in the Eastern Cape at 34.2%.  The labour force participation rate was at 58.5%.

According to the report, employment levels increased in six industries. Large employment gains were observed in finance and other business services (113 000); trade (80 000) and community and social services (42 000) industries.

However, job losses were seen in agriculture (37 000), manufacturing (36 000) and construction (21 000).

Commenting on whether the current drought played a role on the job losses seen in agriculture, Lehohla said: “The drought probably has had its impact but it’s very difficult to isolate the effect of the drought but we know that agriculture lost jobs.  It’s difficult to say because there are carry-on effects from the drought into manufacturing. There are linkages to that sector,” said Lehohla.

Despite the increase in employment levels and the subsequent decrease in unemployment levels, 5.2 million people remain unemployed. 65.7% are young people aged 15 to 34 and 57.6% did not complete matric.

Meanwhile, the expanded unemployment, which includes those who were available to work but did not look for work, declined by 117 000 to 8.2 million.

Nedbank economists said that despite the decline in the unemployment rate, the outlook is unfavourable.

“Despite the decline in the unemployment rate in the fourth quarter, general conditions in the job market remain weak and the outlook is unfavourable due to weak business confidence and subdued economic activity.”

The economists said the Reserve Bank is in a tough position of conducting monetary policy in an environment of rapidly rising inflation, and also poor economic growth.

“However, we anticipate that the Monetary Policy Committee will continue with interest rate tightening, hiking rates by 25 basis points at each of the next three meetings in order to contain the second round inflation effects as well as inflation expectations, and also to provide some financial stability,” said Nedbank.

Meanwhile, Lehohla addressed speculation around the survey results being rescheduled until the day after National Budget. He said the reschedule of the results release was due to quality checks. – SAnews.gov.za