The one province in South Africa where more people are unemployed than working

 ·1 Mar 2023

South Africa’s unemployment rate trended downwards in the fourth 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 (28 February), shows that the official unemployment decreased by 0.2 of a point from 32.9% in the third quarter of 2022 to 32.7% in the fourth quarter of 2022.

Despite the drop in the unemployment rate, the number of unemployed persons in South Africa increased by 28,000 to 7.8 million in the fourth quarter of 2022.

The results of the survey indicate that 169,000 jobs were gained between the third quarter of 2022 and the fourth quarter of 2022. During the same time, however, the working-age population increased by 141,000 or 0.3% in the fourth quarter of 2022 compared to the third quarter of 2022.

Compared to Q4 2021, the working-age population increased by 574,000 or 1.4%. The total number of persons employed was 15.9 million in the fourth quarter of 2022.

The number of people who were not economically active for reasons other than discouragement increased by 95,000 to 13.4 million, and the discouraged work-seekers decreased by 151,000 in the fourth quarter of 2022 compared to the previous quarter resulting in a net decrease of 56,000 in the not economically active population.

Provincial performance

Provincially, the number of employed persons increased in five provinces between Q3: 2022 and Q4: 2022.

Large employment increases were recorded in Western Cape (+167,000), North West (+23,000), Eastern Cape (+20,000) and Northern Cape (+12,000).

Employment losses were recorded in Limpopo (-20,000), Gauteng (-18,000), Mpumalanga (-13,000) and Free State (-3,000) during the same period.

Western Cape recorded the biggest quarter-to-quarter change in employment with an increase of 6.9%.

Compared to Q4: 2021, the largest increases in employment were recorded in Gauteng (+381,000), Western Cape (+333,000), Mpumalanga (+134,000), Limpopo (+133,000) and Eastern Cape (+132,000).

Northern Cape had the biggest year-on-year percentage change in employment with an increase of 27.0%, followed by Western Cape and Mpumalanga with increases of 14.7% and 12.7%, respectively.

Looking at the extended definition of unemployment, however, the situation is much worse.

The Western Cape is the only province with an unemployment rate still below 30%, with all other provinces sitting with between 39% and 52% of their adult populations without work or not seeking work.

One province – the North West – has more adults out of work and not looking, than people who are employed, with an unemployment rate of 52.3%. This is closely followed by Limpopo province, which just missed the halfway mark at 49.6%.

According to banking group, Absa, the Q4 unemployment data shows a further recovery in employment for South Africa but cautioned that some of the progress likely reflects seasonal effects.

Prospects for employment for the year ahead are also bleak, with the bank expecting a slowdown in the pace of job growth in the face of weaker economic growth.

The South African Reserve Bank expects GDP growth to register a paltry 0.3% for 2023, with even the most optimistic projections from analysts barely scraping past 1.0%.

Economists at Nedbank noted that employment levels are still at the same levels seen in 2016.

For the whole of 2022, about 1.4 million jobs were created after 479,000 were lost in 2021, the group said.

“Even so, the rate of job creation was contained by the multiple shocks experienced during the year, which depressed business confidence and forced companies to restructure their operations – including cancelling or postponing capital expenditure plans and laying off workers,” it said.

“The good news is that total employment continued to recover from the impact of the Covid-19 disaster – even though the number of jobs created is still below the pre-crisis levels.”

Investec chief economist Annabel Bishop said that despite the marginal improvement in unemployment in the fourth quarter, consumers remain constrained.

“Real incomes have declined, while the indebted are having to contend with markedly higher interest rates. A significant pick up in confidence is imperative to drive sustainable growth and accordingly job creation,” she said.

Read: Job warning in one of South Africa’s most important sectors

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