SA’s employment rate improves marginally

SOUTH AFRICA’S unemployment rate in the fourth quarter of last year recoiled from its highest in 13 years as key sectors hired more workers, a further sign of recovery in an economy that somewhat toyed with recession in 2016.

Statistics South Africa on Tuesday released their Quarterly Labour Force Survey which indicated that South Africa’s unemployment rate decreased by 0.6% to 26.5% in the fourth quarter of 2016 from its high in the third quarter as employment grew by 235 000.

While many politicians might boast about the key efforts being made in reducing the country’s frightening unemployment rate, it doesn’t take away from the fact that Brazil, who have a population of 200 million and have experienced a deep recession for the past two years, has an unemployment rate of 11.9%, less than half that of South Africa, with its population of 53 million.

Stats SA noted that about 8.9 million South African’s are still actively seeking jobs, and unemployment among youth aged 15-34 remains worryingly high at 37.1%.

Breaking down the numbers
The main driver of employment was the services industry followed by transport and manufacturing sectors which grew by 73 000, 46 000 and 44 000, respectively.

Unfortunately, mining and construction industries, the biggest employers of unskilled and semi-skilled workers actually showed a drop in employment quarter by quarter, they fell by 17 000 and 9 000 respectively.

According to Dr Irrshad Kaseeram, Deputy Dean (Research and Internationalisation) in the Faculty of Commerce Administration and Law at the University of Zululand, this is an indicator of the pressures facing our local economy in mining and construction, which are significant contributors to the sub-regional GDP.

‘These sectors are likely to shed further jobs as long as commodity prices remain low, although in recent weeks there is an upward movement in prices.

‘Moreover there is a global gradual shift away from coal to renewable energy sources, hence in the long term further jobs are likely to be shed.

‘However the rise is the services sector is encouraging for the economy for it might indicate that the tourism industry, for example, is on a growth path, thus unlocking job opportunities in the region.

Discouraging Investors

Dr Kaseeram stated that South Africa has been following policies that are discouraging investors from making serious investments in the local economy.

‘These policy concerns include uncertainties in the mining charter, onerous rules and regulations ranging from labour employment to BBEE, emigration of skilled foreign nationals, political risks, patronage, corruption, possible credit rating downgrade, low growth potential and an unstable currency.

‘Such factors, as well as governments indifference to the concerns raised by the business community, make it difficult for investors to work out their rates of returns, hence they will steer clear of such an unfriendly business environment,’ he said.

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