JOHANNESBURG, 23 FEBRUARY 2021 – The quarterly labour force survey (QLFS) data released by Statistics South Africa (StatsSA) today reflects the challenge faced by the Government in dealing with inequality and poverty as the impact of COVID-19 deepens across the major economic sectors, the Steel and Engineering Industries Federation of Southern African (SEIFSA) said today.

According to StatsSA, South Africa’s unemployment rate rose to 32.5% in the fourth quarter of 2020, from 30.8% in the previous period. This is the highest jobless rate since quarterly data became available in 2008, amid the ongoing lockdown aimed at fighting the spread of the pandemic, which has contributed to the depressed economic environment. The labour force participation rate was also higher in the fourth quarter of 2020 when compared to the third quarter of 2020 because of these movements, thus increasing by 2.4 percentage points to 56.6% as reported.

“Job creation should be a consolidated effort by both the Government and the private sector. The repeated trends of jobs being lost in key demand-driving sectors of the Metals and Engineering (M&E) sector, such as construction, is worrying as it demonstrates lack of business activity. For unemployment levels to fall, investment- driven economic recovery is key,” said SEIFSA Chief Economist Chifipa Mhango.

Mr Mhango said he remains hopeful that the Government’s economic revival plan, which plans to increase infrastructure spending to unlock R1-trillion in private investment over the next four years, while also directing R1-billion towards job creation, will be positive for the M&E sector. However, he cautioned that its sustainability remains a concern as it will weigh on fiscal accounts and Treasury’s consolidation efforts.

Mr Mhango also said he expected the economy to rebound in 2021, as economic activity gradually recovers amid lockdown easing. However, he added that South Africans need to remain cautious and adhere to COVID-19 safety protocols to mitigate the risk of a resurgence of the virus if the current recovery is to be sustained.

He noted the importance of the M&E sector as a contributor to the economy: “The contribution of the sector to overall employment remains key for the economy. However, persistent challenges faced by business in the sector, such as high electricity costs as well as disruption in its supply, rising logistics costs and imports, are likely to weigh negatively on the industry, thus affecting job creation in the overall manufacturing sector,” he said.

“Job creation relies on the economic growth of the country. We, therefore, wait to hear what the Government plans in tomorrow’s budget speech. We expect a national budget package that will provide a stimulus in the form of infrastructure spending, incentives for manufacturing industries both small and large, and a budget that focuses on addressing the challenges of local industries’ lack of competitiveness,”  Mr Mhango concluded.



Issued by:

Mpho Lukoto

Communications Manager

Tel: (011) 298 9411 / 082 602 1725