Johannesburg - South Africa’s jobless rate fell in the three months through June as manufacturing and construction employed more people.
The unemployment rate decreased to 26.6 percent in the second quarter from 26.7 percent in the previous three months, Statistics South Africa said in a report released on Thursday in the capital, Pretoria. The number of people without jobs fell by 90 000 to 5.6 million and the employed decreased by 129 000 to 15.5 million, as more people gave up looking for a formal job, according to the statistics office.
Gross domestic product in Africa’s second-largest economy contracted an annualised 1.2 percent in the three months through March and will probably not grow at all this year, according to the central bank, as the worst drought in more than a century, low commodity prices and weak demand in its main export markets weigh on output. The nation has struggled to boost employment since 2009 and has the highest jobless rate of more than 60 countries tracked by Bloomberg.
“In an economy that is not growing, it is very likely that we will stop employing,” Thabi Leoka, an economist at Argon Asset Management, said by phone in Johannesburg before the release of the data. “Unemployment and GDP go hand-in-hand.”
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Manufacturing added 67 000 jobs in the quarter and employment in construction rose by 25 000, the statistics office said. The number of people working in agriculture dropped by 44,000 and community and social services, which includes the government, employed 127 000 less people than in the first three months of the year.
Economic growth in South Africa is too slow to improve living standards, the International Monetary Fund said this month. The nation needs annual expansion of 7.2 percent from 2018 to achieve the government’s goal of reducing the jobless rate to 6 percent by 2030, the World Bank said in February.
The rand was little changed at 14.2459 per dollar as of 12:36 a.m. in Johannesburg on Thursday. Yields on rand-denominated government bonds due December 2016 fell 1 basis point to 8.75 percent.
-With assistance from Simbarashe Gumbo.
BLOOMBERG