South Africa’s unemployment rate surges

Business Reporter
SOUTH AFRICA’S unemployment rate deteriorated to 25,6 percent in the second quarter from 25,2 percent in the first quarter‚ as people lost jobs in the manufacturing‚ agriculture and community sectors. According to the South African Statistics Agency, a total of 100 000 new jobs were created but this was offset by an additional 122 000 people searching for jobs.

Approximately 4,7 million South Africans are unemployed, meaning that up to 254 000 more people have become unemployed compared to the second quarter last year.

The sluggish and uncertain economic growth environment is among factors contributing to the very low levels of employment creation.
Analysts believe that the weak economic growth would continue to drive up the unemployment rate in South Africa this year.

The expanded unemployment rate‚ which includes those who have stopped looking for work‚ represents 36,8 percent of the labour force in that country‚ 0,1 of a percentage point higher when compared to the first quarter. Africa’s biggest economy is set to expand this year at its slowest pace since the 2009 recession, according to forecasts from the central bank, as a recession in Europe saps demand for manufactured exports and mining strikes curb output.

Joblessness and rising prices are undermining consumer spending, which accounts for more than 60 percent of expenditure in the economy.

The country’s manufacturing sector‚ which makes up around 15 percent of the economy, shed 18 000 jobs between the first and second quarters‚ while agriculture shed 26 000 jobs.

The community and social services industry‚ which includes public sector jobs‚ dropped by 22 000 jobs.

Both the formal and informal non-agricultural sectors grew by 1,1 percent and 1,4 percent respectively in the second quarter. SAS said construction‚ trade and finance and other business services were the biggest contributors to the 100 000 net gain in employment in the second quarter.

Construction gained 62 000 jobs in the quarter‚ after losing 41 000 jobs in the first quarter. Trade gained 52 000 jobs in the second quarter‚ the first gain in this sector after five successive quarters of job losses.

The South African Central Bank reduced its economic growth forecast for 2013 to 2 percent from 2,4 percent, less than half the rate needed to create its target of five million jobs by 2020.