The provinces in South Africa where more people are unemployed than working
South Africa’s unemployment rate trended downwards in the third quarter of 2022 despite the inflated cost of living, rising interest rates and fuel prices, and worsening load shedding.
The latest Quarterly Labour Force Survey (QFLS), published by Statistics South Africa on Tuesday (29 November), shows that the official unemployment decreased by one percentage point from 33.9% in the second quarter of 2022 to 32.9% in the third quarter of 2022.
This marks the lowest unemployment rate in six quarters, as the number of unemployed persons declined by 269,000 to 7.725 million, while employment rose by 204,000 to 15.765 million.
The data shows that the number of employed persons decreased in three provinces between Q2 2022 and Q3 2022 – with the exceptions being Gauteng, Western Cape, Kwa-Zulu Natal, Mpumalanga, and the Eastern and Northern Capes.
The most significant employment decreases were recorded in the North West (-66,000 jobs), Limpopo (-55,000) and the Free State (-9,000).
The updated unemployment data shows that there are now two provinces in South Africa with an expanded unemployment rate of more than 50%, while Limpopo is toeing the line at 49.9%.
These two provinces are:
- The North West (53.3%); and
- Eastern Cape (50.6%).
The reality remains discouraging
Despite the positive trend indicated by the QLFS, the total employment level remains below pre-Covid levels. According to economists from the Bureau for Economic Research, employment levels are still about 600,000 (4%) below the pre-Covid (2019Q4) situation.
According to PSG Wealth, while Manufacturing (+123,000) and trade (+82,000) saw the biggest jumps in employment during Q3 2022, the overall decrease of 1% in the unemployment rate could be a result of a lag in the data, which represents the workers who returned to the labour market after the pandemic as vaccination rates rose.
The QLFS showed that the steepest losses in jobs were experienced in finance (-80,000), private households (-36,000), and mining and agriculture (-1,000 each).
Economists at Nedbank said that although the decrease in employment is encouraging, considering the economic challenges faced by South Africa, job creation is still lower than what was seen in Q2 2022.
“The manufacturing sector created the highest number of jobs, bouncing back significantly from a decline in the second quarter. These gains also occurred amid extensive power disruptions. Employment also increased in construction, trade, and community and social services, but the number of jobs added by these industries was lower than in the second quarter,” Nedbank said.
Nedbank also said that the outlook for the job market remains uncertain, given the prevailing headwinds.
“Business confidence deteriorated further, with the RMB/BER Business Confidence Index remaining below the neutral 50-level for the sixth consecutive quarter in the fourth quarter, falling to 38 – its lowest since the second quarter of 2021.
“The deterioration reflected a combination of global and local unfavourable factors. Internationally, the key concern is the impact of slowing global growth which will hamper the performance of export-orientated industries,” the bank said.
Locally, adverse labour market conditions, including frequent labour strikes, high wage demands, high inputs costs and power shortages, continue to discourage private sector investment, constraining job creation.
According to central bank deputy governor Rashad Cassim, South Africa’s economy needs to expand consistently at 5% for years to create jobs and lower an unemployment rate that’s among the world’s highest.
For an economy that expanded at an average rate of 1% in the past decade – and is hampered by rolling electricity outages, labour unrest and transport bottlenecks – accelerating growth to 5% may be a challenge.
Going from a 1% economy to 3% isn’t rocket science for South Africa, said Cassim. “Unfortunately, 3% gets the economy going, but it will not bring the unemployment down. We need systematic 5% growth every year to get unemployment down, which is a different debate.”
PSG Wealth CIO Adriaan Pask added that to ensure an upward trend in employment, the private and public sectors must accelerate the implementation of structural and pro-business reforms to unlock investment, reduce costs and increase competitiveness and growth, which will go a long way in creating sustainable employment.
Read: 29 jobs in South Africa that pay R2 million or more a year
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