A NEW DAWN FOR UNEMPLOYMENT ALLEVIATION?
In the 4th quarter of 2017, the unemployment rate in South Africa decreased to 26.7% from 27.7% in Q1, Q2 and Q3.
Looking at specific sectors, job losses were as follows:
• Finance and other business services: 92,000
• Mining: 39,000
• Trade: 25,000
• Transport: 5,000
• Utilities: 4,000
On the positive side; Manufacturing added 13,000 jobs – the highest number added. Construction and community and social services added 7,000 jobs each.
On an annual basis, the unemployment rate was slightly higher than the 26.5% in Q4.16 as job losses in the construction, agriculture and mining industries largely offset the employment gains in the government, manufacturing, finance and transport industries.
The 2017 unemployment rate increased to an average of 27.5% from 26.7% in 2015, exceeding the 23 – 24% unemployment rate during the 2008/09 recession. This figure is at the highest level since 2003.
It’s important to note that the weak economic growth and muted business confidence has contributed to the high unemployment rates in the country.
According to the SARB, private sector job creation typically takes place in a 2% plus GDP growth environment. Now that South African Business confidence has recovered since President Ramaphosa has taken office, it could be said that we can expect more economic activity in the country.
In the 2018 SONA delivered last week Friday, rapid economic growth was placed firmly on the agenda to lift and drive employment, thereby alleviating poverty and inequality, as the need for a substantial strengthening in business confidence and private sector investment was formally recognized.
It will be key to hear what will be tabled at the Budget Speech this week. How the fiscus is spent will determine where the growth areas are. Specifically, with the new leadership in SA, we expect more execution when it comes to economic growth initiatives in all sectors, specifically the infrastructure development which should support the construction sector.