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South African jobless rate swells to worst level in 10 years under Ramaphosa

by Staff reporter
23 Jun 2020 at 15:02hrs | Views
South Africa's official unemployment rate has risen to 30.1%, the highest rate in the past decade.

Statistics South Africa on Tuesday released its quarterly labour force survey for the first quarter of the 2020.

In the fourth quarter of 2019, SA's unemployment rate was 29.1%, meaning it has increased by 1 percentage point.

According to data from Trading Economics, the last time the unemployment was above 30% was in the third quarter of 2002, when it reached 30.4%.

Stats SA said on Tuesday that the number of unemployed persons in SA had increased to 7.1 million in the first three months of the year, while the number of employed people decreased to 16.4 million.

While the lockdown instituted on March 26 to slow the spread of the Covid-19 virus resulted in restricted in economic activity, the statistics for the first quarter only cover the first three months of the year.  

Treasury, meanwhile, has projected between 690 000 and 1.8 million job losses as a result of the pandemic, as Fin24 previously reported.

In recent weeks large corporates such as logistics and fleet management group Barloworld, mobile operator Cell C and troubled clothing retailer Edcon have launched retrenchment consultation processes.

"We expect further job shedding to have transpired toward the end of the first quarter amid the declaration of the pandemic as a national disaster on 15 March 2020," FNB said in an economic note ahead of the release of the data.

"In addition, the attrition of temporary retail employment from the festive season in the final quarter of last year may well have exacerbated the unemployment number," the note read.

South Africa is not unique in this position, with the global economy set to contract as much as 5.2% according to the World Bank's projections. Its global counterparts such as the US recording job losses exceeding levels recorded in the Great Depression.

Formal sector disappoints

The largest job losses were observed in the formal sector, Stats SA said. Declines were recorded in seven out of 10 sectors - namely finance, community and social services, agriculture, transport, manufacturing, construction and utilities. Only the mining and trade industries reported job gains.

The informal sector and private households bucked the trend, and managed to increase employment.

Source - fin24