South Africa’s unemployment rate trended downwards in the second quarter of 2023 despite the inflated cost of living, high interest rates and fuel prices, and worsening load shedding.
The latest Quarterly Labour Force Survey (QFLS), published by Statistics South Africa on Tuesday (15 August), shows that the official unemployment decreased by 0.3% from 32.9% in the first quarter of 2023 to 32.6% in the second quarter.
According to the data, the number of unemployed persons also dropped by 11,000 to 7.9 million during the period.
However, the number of people who were not economically active for reasons other than discouragement jumped by 93,000 to 13.3 million, while the number of discouraged work-seekers declined by 94,000 in Q2 2023 compared to Q1, which resulted in a net decrease of 1,000 of the not economically active population.
The expanded definition of the unemployment rate also dropped by 0.3% from 42.4% to 42.1% in Q2 2023.
Provincially, the number of employed persons increased in seven provinces between Q1: 2023 and Q2: 2023. Large employment increases were recorded in Limpopo (+80,000), the Western Cape (+54,000), and KwaZulu-Natal (+48,000)
Employment losses were recorded in the Free State (-59,000) and the Northern Cape (-17,000).
Compared to Q2:2022, the most significant increases in employment were recorded in Western Cape (+368,000), Gauteng (up by 201,000), KwaZulu-Natal (+161,000), Eastern Cape (+101,000) and Limpopo (+77,000).
Free State, North West and Mpumalanga were the provinces that experienced losses in employment, with a decrease of 77,000, 43,000 and 9,000, respectively, during the same period.
Western Cape recorded the biggest year-on-year change in employment, with an increase of 15.7%.
The provinces with the most employed
According to the latest data, the Western Cape has the lowest unemployment rate in South Africa at 20.9%, meaning it has the most people working than unemployed in the country. This is then followed by the Northern Cape (26.9%), Kwa-Zulu Natal (31%) and Limpopo (31%).
It also has the highest labour participation rate in South Africa at 68.8%, 0.3% more than Gauteng. Additionally, the Western Cape is the only province that has consistently been well below the South African average official unemployment rate over the past ten years, with KZN toeing the line.
The City of Cape Town noted that it had added 263,000 new jobs over the last year and 56,000 new jobs in the previous quarter alone, more than all other metros combined.
The metro’s unemployment rate fell by 7% year-on-year, down a further 1,7% since the last quarter based on the expanded unemployment definition, which offers the most complete estimate.
In contrast, over the last ten years, the Eastern Cape has consistently been above the average official
However, looking at the extended definition of unemployment, the situation is much worse for most provinces.
The Western Cape is the only province with an unemployment rate below 30%, with all other provinces sitting between 39% and 54% of their adult populations without 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 53.5%. This is closely followed by Mpumalanga province, which just missed the halfway mark at 49.5%.
According to banking group FNB, the Q2 unemployment data shows a further recovery in employment for South Africa but cautioned that the private household sector has dragged on the overall recovery, reflecting mounting cost-of-living pressures.
“The domestic labour market has shown signs of resilience, adding over 2 million jobs since 4Q21. Although employment recovery remains incomplete in the private household sector, recovery in the critical formal non-agricultural sector is complete,” it said.
“However, the prevailing economic weakness alongside the dynamic impact of load-shedding poses a downside risk to the ongoing labour market momentum,” it added.
The bank noted the domestic economy is expected to stagnate at 0.2% this year, following 1.9% growth in 2022, before gradually recovering 1.8% by 2025. More employment gains are required to reduce the unemployment rate amid a growing population. Combined with human capital investments, this will be key in lifting potential growth in the long run.