Focus on policy implementation required to reverse soaring unemployment, says SEIFSA.

JOHANNESBURG, 24 AUGUST 2021 – The Quarterly Labour Force Survey (QLFS) data released today by Statistics South Africa (Stats SA) is a sign that efforts to reverse the impact of COVID-19 on the economy and employment will continue to be a bumpy ride unless there is a focus on Government policy implementation, the Steel and Engineering Industries Federation of Southern African (SEIFSA) said today.

According to Statistics South Africa, South Africa’s unemployment rate rose to 34.4% in the second quarter of 2021 from 32.6% in the previous quarter, a new record. The largest number of job losses was recorded in Finance (278 000), followed by Community and Social Services (166 000) and Manufacturing (83 000).

When compared to other countries, the level of unemployment in South Africa is far higher than in economies such as Brazil (14.7%), China (5%), India (9.2%) and Russia (4.9%); which are all part of the BRICS economic development partnership, alongside South Africa.

Commenting on the new unemployment figures, Mr Chifipa Mhango, Chief Economist at SEIFSA, said it is clear that the Government needs to urgently focus on job creation efforts as it tries to revive the economy. “Key to addressing this challenge, will be the speedy implementation of Government economic policies to address the bottlenecks in the economy, with an investment drive to key sectors of the economy such as manufacturing,” Mr Mhango said.

He said SEIFSA remains concerned about the job losses experienced in the Metals and Engineering Sector. The sector’s contribution to overall total manufacturing employment has dwindled from 37.9% levels in 2008 to 35% today. The sector lost 35,000 jobs in 2020 alone.

Mr Mhango said challenges facing businesses in the M&E Sector such as high electricity costs, unreliable energy supply as well as disruption in raw material supply, rising logistics costs and cheap imports have continued to weigh negatively on the industry. He said while the Government and businesses in the sector and other stakeholders have partnered to address these challenges through the implementation of the Steel and Metals Fabrication Master Plan 1.0, there needs to be a sense of urgency to implement the interventions. “It is important that the Government continues to engage with the sector to identify obstacles that could prevent the speedy implementation of the masterplan,” he said.