Persistent Increase In Unemployment Numbers Will Delay Efforts To Reindustrialise The Economy, Says SEIFSA

Johannesburg, 23 June 2020 – The quarterly labour force survey (QLFS) data, which reflects an increase in the number of unemployed people for Q1 of 2020 before the Coronavirus-induced economic crisis, does not bode well for reindustrialisation efforts, but presents an opportunity to rejig job creation opportunities in line with new job roles, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.

Speaking after the release of the data by Statistics South Africa this morning, SEIFSA Economist Marique Kruger said the results of the QLFS highlight the persistent nature of unemployment in South Africa, which is a stumbling block in Government’s re-industrialisation efforts.

On aggregate, the data show that 38 000 jobs in total were lost on a quarter-on-quarter basis between the first quarter of 2020 and the fourth quarter of 2019, amounting to a 0.2 percent decrease in employment. This is disconcerting as it increases the official unemployment rate to 30.1 percent in the first quarter of 2020, from 29.1 percent.

The data generally highlight a need for a systematic review of all industrial sectors, supported by urgent targeted interventions, in order to address latent factors hindering job creation in each sub-industry. The data also specifically showed that the manufacturing sector (including its heterogenous metals and engineering (M&E) sector), lost 0.8 percent of total employment, which equates to 15 000 jobs. Between the first quarter of 2020 and the fourth quarter of 2019. The number of employed people decreased from 1 720 000 during quarter four 2019 to 1 706 000 during quarter one 2020. On a year-on-year basis, the manufacturing sector lost an alarming 74 000 jobs, representing 4.2 percent.

“The increasing unemployment rate is cause for concern.  However, the situation presents a unique opportunity for both policy makers and key business stakeholders to rearrange policies or investment incentives towards creating new job roles ranging from customer service associates to technical staff, who can adapt to the so-called new normal and also work virtually,” Ms Kruger said.

She said this implies that efforts should be aimed at reducing the cost of existing internet connection or creating cheap, dedicated internet links for unemployed citizens, through internet stipends or service providers, thereby boosting their employability. She said such an intervention would be good for the large population of skilled and unemployed university graduates in South Africa as it would boost their ability to look for jobs.

Ms Kruger said the stubbornly high unemployment rate requires for Government to abstain from doing the same things, but strategically to support skills or initiatives that will prepare unemployed citizens with specific skills, rendering them competitive in the job market and ready for new opportunities. Examples of such opportunities include jobs in coding since local companies are increasingly embracing digitisation and automation, as well as jobs in artificial intelligence and data science.

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