Johannesburg, 30 July 2019 – The increase in the number of unemployed people in South Africa calls for urgent interventions to address the scourge, Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Economist Marique Kruger said today.
Speaking after Statistics South Africa (Stats SA’s) release of the Quarterly Labour Force Survey (QLFS) for Quarter 2, which reflects a further increase in the number of unemployed people in the domestic economy, Ms Kruger said the Federation was extremely concerned about the increase in the unemployment rate and called on policymakers to come up with more targeted interventions to address the unemployment challenge.
The QLFS is a household-based sample survey that captures labour market activities of persons aged 15-64 years. The data shows that following an increase in the labour force participation rate by 0.7 percentage points from Q2 2018 to Q2 2019, the unemployment rate also increased from 27.2 percent to 29.0 percent. Compared to a year ago, the data also shows that employment increased by 25 000, while unemployment alarmingly increased by 573 000, leading to a net year-on-year unemployed persons of 548 000.
Ms Kruger said the general decrease in aggregate employment is cause for concern, as the data increases the official unemployment rate to 29 percent.
“On a quarterly basis, the data shows that although the number of employed persons increased by 21 000 to 16.3 million in Q2 of 2019, there was a more than proportionate increase in the number of unemployed persons, thereby compounding the unemployment number to 6.7 million persons. This is cause for great concern and calls for urgent interventions to address the scourge of unemployment,” Ms Kruger says.
At an industry level, Ms Kruger says the information encouragingly captures an increase in the number of employed persons in the manufacturing sector on a quarter-on-quarter basis. The sector, including its heterogenous metals and engineering (M&E) cluster, gained
9 000 (0.5 percent) jobs, with employment increasing from 1 780 000 during the period spanning January to March 2019 to 1 789 000 during the period spanning April to June 2019. When viewed over a longer period, the data shows that the manufacturing sector gained a total of 45 000 jobs, representing a 2.6 percent increase year on year.
In other industrial sectors, however, changes in employment numbers were varied as the mining sector recorded a net loss of 36 000 jobs on a quarter-on-quarter basis, while the construction sector gained 24 000 jobs over the same time frame.
According to Ms Kruger, the unemployment situation, a dilemma which spans all industrial sectors, is increasingly becoming an issue which is difficult for policy makers and captains of industry to deal with.
“Against the backdrop of an increase in the official unemployment rate, the persistent high level of unemployment highlights the need for more targeted interventions by policy makers. Moreover, continuous support for businesses under duress is imperative to achieve and maintain higher economic growth in the medium to longer term,” she concludes.