The areas in South Africa where more people are unemployed than working

South Africa’s unemployment rate surged to the highest on a global list of 82 countries monitored by Bloomberg.

The country’s jobless rate rose to 34.4% in the second quarter from 32.6% in the three months through March, Statistics South Africa said in a statement on Tuesday (24 August).

Unemployment according to the expanded definition, which includes people who can work but are discouraged from doing so, rose to 44.4% from 43.2% in the first quarter.

Youth aged 15-24 years and 25-34 years recorded the highest unemployment rates of 64.4% and 42.9% respectively, StatsSA said.

The formal sector in South Africa accounts for 68.3% of total employment. The data showed that the formal sector employment decreased by 375,000 jobs between Q1:2021 and Q2:2021.

 

More unemployed than working

The data shows that the number of employed persons decreased in four provinces between Q1 2021 and Q2 2021.

The largest employment decreases were recorded in Eastern Cape (-66,000), Northern Cape (-57,000), Western Cape (-53,000) and KwaZulu-Natal (-8,000).

By comparison, employment gains were recorded in the North West (+45,000), Mpumalanga (+33,000), Gauteng (+22,000), Free State (+20,000) and Limpopo (+9,000).

The Northern Cape recorded the biggest change in employment over the period, with a decrease of 18.1%, followed by Eastern Cape (5.1%).

Both provinces now have an expanded unemployment rate exceeding 50%  – with more people unemployed than have jobs, citing the expanded definition of employment. Limpopo’s unemployment rate sits at 49.9%.

The number of employed persons decreased in three of the 10 major industries, with the largest decreases recorded in:

  • Finance (-278,000)
  • Community and social services (-166,000)
  • Manufacturing (-83,000).

The largest increases in employment were recorded in construction (+143,000) and trade (108,000).

Compared to the same period last year, a net increase of 793,000 in total employment in Q2 2021 was largely due to gains in the number of people employed in private households, such as domestic workers and carers, as well as the community and social services, StatsSA said.

A hole in the job market 

The outlook for the job market remains poor on the back of subdued and uncertain economic conditions, Nedbank said in a research note analysing the unemployment data.

“Although the economy is slowly moving towards higher ground, private firms were hard hit by last year’s strict lockdown, while the repeated return to tighter restrictions and the destruction caused by the riots in July continues to undermine confidence and disrupt production, robbing firms of the space to recover and the ability to form a clear image of future demand conditions.”

As a result, companies are hesitant to hire and to expand operations as economic conditions could easily take a turn for worse, Nedbank said.

It added that the public sector cannot fill the void left by a retreating private sector given its stretched finances and already bloated staff numbers.

“Employment is likely to start edging up in 2022, but the unemployment rate will remain structurally high, as more discouraged work seekers will return to the job market as the economy gathers some pace.”


Read: South Africa unemployment rate hits new record high

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The areas in South Africa where more people are unemployed than working