StatsSA said its Quarterly Labour Force Survey showed that unemployment increased by 1 percentage point to 30.1 percent in the first quarter of 2020. Photo: Jerome Delay/AP
StatsSA said its Quarterly Labour Force Survey showed that unemployment increased by 1 percentage point to 30.1 percent in the first quarter of 2020. Photo: Jerome Delay/AP

Number of jobless people in SA expected to hit record high

By Siphelele Dludla Time of article published Jun 24, 2020

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JOHANNESBURG – South African joblessness was expected to hit record highs in the second quarter, when the country finally tallies the impact of the coronavirus on the economy.

Statistics South Africa (StatsSA) said on Tuesday that the future looked bleak, as the number of unemployed people increased by 344 000 to 7.1 million between January and March from 6.7m in the fourth quarter of 2019.

StatsSA said its Quarterly Labour Force Survey showed that unemployment increased by 1 percentage point to 30.1 percent in the first quarter of 2020, from 29.1 percent in the fourth quarter of 2019.

This is the second consecutive decline in employment in the first quarter of each year after increases in the first quarters of 2017 and 2018.

StatsSA said the number of employed decreased by 38 000 to 16.4m in the three months to March.

Statistician-general Risenga Maluleke said the official unemployment rate breached a significant milestone. “This is the first time ever that we have hit the 30 percent mark,” Maluleke said. The expanded unemployment rate, which includes individuals who desire employment regardless of whether they are actively seeking work, increased to 39.7 percent from 38.7 percent.

StatsSA said the largest job losses were in clerical occupations, followed by technicians and professionals.

It said unemployment among the black African population group remained higher than the national average and other population groups.

The agency said youth unemployment now stood at 41.7 percent.

FNB chief economist Mamello Matikinca-Ngwenya said more firms would come under pressure in the next few months. Matikinca-Ngwenya said the country would probably see more firm closures and more people losing their jobs.

“Our expectations are for the labour market to remain under a significant amount of strain throughout this year and, of course, sectors that are very sensitive to output will be the hardest hit,” Matikinca-Ngwenya said.

“Our preliminary estimates point to around 900 000 job losses for this year. In the absence of reforms and growth-enhancing measures, it is going to be very difficult to see how the economy regains some of these job losses.”

This week, President Cyril Ramaphosa warned of massive job losses resulting from shutting down economic activity during the lockdown.

The government will today table a Special Adjustment Budget, seeking to manage public spending and scale back on projects.

Investec’s Lara Hodes said South Africa had one of the highest unemployment rates in the world, with weak economic growth even prior to the current global financial crisis.

“The unprecedented situation we find ourselves in at the moment will serve to exacerbate the dire domestic unemployment predicament significantly as business closures and cutbacks accelerate,” Hodes said.

“Consequently, we expect the unemployment rate to average in excess of 36 percent over the medium term."

BUSINESS REPORT

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