Coronavirus in SA: A national shutdown could see unemployment jump to 13 million
The national shutdown could see the number of unemployed jump to 13 million, according to a “guessestimate” from Mike Schussler of economists.co.za.
“All I can do is guess. I am working on employment, but my best guess is that 1 in 8 jobs go if longer than say two or three months. Unemployment could then peak above 13 million,” Schussler said.
He noted that small businesses that are digital, such as accountants, lawyers and other professionals will be fine, but hotels, Bed and Breakfasts, garden service, hairdressers, restaurants, bars, nightclubs, gyms, will see massive closures after one month, while petrol stations, dry cleaners, small shops and informal traders, Uber, taxis will all struggle if this goes on for longer than 2 months.
“Take out eating places should be okay, but work canteens may also be hit as workers stay at home to telework. Domestic workers will feel the pinch as their employers will struggle. Manufacturing is also close to the edge in many, many cases. Construction activity will take a year to come back, so lots of losses there,” he added.
In his view, the transport of freight will be okay, but business will be less, which will put pressure on margins as hauliers compete for a smaller pie, but lower fuel costs could save a few, but not all. Air transport will be lucky to survive, as will those firms with a big debt burden unless help from the government and the central bank come fast.
Nicky Weimar, the chief economist at Nedbank, said the national shutdown will impact both the first and second gross domestic product (GDP) data.
“Our GDP forecast is for a small 1% decline in the first quarter and then a larger 7.5% contraction in the second quarter, followed by a modest recovery in the second half. GDP for the year will then fall by 1.6%,” Weimar said.