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South Africa’s unemployment rate climbs to 27.6%

| Economic factors

Stats SA has published its latest Quarterly Labour Force Survey for the first quarter of 2019, showing that the country’s unemployment rate has risen in the first three months of the year.

This puts the current rate 0.5 percentage points higher than the last quarter of 2018 – where it sat at 27.1%.

Including ‘discouraged work seekers’ this put the expanded unemployment rate at 38%, Stats SA said.

The data is in line with what the market expected, following several indicators of slow growth in the first quarter of the year.

It is also in line with seasonal trends, where many sectors end up laying off the temporary staff hired to work over the busy festive period.

According to Stats SA, the number of employed persons decreased by 237,000 to 16.3 million in Q1 2019, while the number of unemployed persons increased by 62,000 to 6.2 million compared to Q4 2018.

This led to a net decrease of 176,000 (down by 0.8%) in the number of people in the labour force.

The absorption rate decreased by 0.7 of a percentage point to 42.6% and the unemployment rate increased by 0.5 of a percentage point to 27.6% compared to the fourth quarter of 2018.

Employment decreased in all four of the sectors in Q1 2019, with the formal sector recording the largest employment losses of 126,000, followed by the informal sector (68,000), private households (31,000) and agriculture (12,000).

The number of discouraged work-seekers and the number of people who were not economically active for reasons other than discouragement increased by 156,000 and 169,000, respectively, between the fourth quarter of 2018 and the first quarter of 2019, resulting in a net increase of 325,000 in the not economically active population.

Employment by industry

Between Q4 2018 and Q1 2019, the number of employed persons decreased in six of the ten industries, with the largest decreases recorded in construction (142,000), finance and other business services (94,000), community and social services (50,000) and private households (31,000).

However, employment gains were recorded in transport (59,000), trade (25,000), utilities (16,000) and manufacturing (14,000).

Compared to the same period last year, employment losses of 86,000 persons were largely driven by community and social services (211,000), construction (92,000), manufacturing (69,000) and agriculture (9,000) in Q1 2019.

Meanwhile, finance and other business services had the largest gain of 114,000 during the same period.

Read: South Africa’s massive jobs challenge: balancing automation and unemployment

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