Slight drop in unemployment

2008-10-02 00:00

Notable challenges in relation to unemployment still face the KwaZulu-Natal economy, despite the fact that unemployment in the province during the second quarter of 2008 declined by half a percentage point compared with the first quarter.

The province’s manufacturing sector shed thousands of jobs in only three months (April to June 2008), according to information released at the launch workshop of the quarterly labour force survey in Durban yesterday.

The event was attended by the national statistician-general, Pali Lehohla.

Unemployment in KZN declined to 22,2% in the second quarter from 22,7% in the first quarter, in line with the national “picture”, which revealed similar modest gains amid challenging national economic conditions.

The number of employed people in the province grew from 2,562 million to 2,614 million (up by 52 000) during this three-month period.

As expected, jobs in the manufacturing sector in the province took a major knock, probably as a result of a general slowdown coupled with the effects of the electricity crisis.

Manufacturing in KZN shed 13 000 jobs quarter on quarter — down nearly three percent.

The province’s trade (wholesale and retail) sector “lost” about 10 000 jobs — down 1,7% quarter-on-quarter. However, the KZN finance sector’s employment figures grew significantly during the second quarter.

Construction in KZN continued to create jobs and employment in this sector grew by nearly five percent quarter on quarter.

This positive development has no doubt emerged in the wake of the government’s massive infrastructure spending programme in KZN.

The statistics seem to indicate that KZN essentially accounted for about half of all the jobs created in South Africa during the second quarter.

One perplexing statistic relates to the fact that the agriculture sector in KZN was the main driver of job creation in the province.

Job creation in this sector rose by 27,9% or 36 000 quarter on quarter.

Economist Clive Coetzee believes that the majority of these jobs were most likely created in the “informal” agricultural sector in KZN.

“This could be subsistence farming, but not commercial farming.”

According to Statistics SA’s KZN executive manager, Nthabiseng Makhatha, the province’s labour absorption rate remains below the national average.

The percentage of people employed in the informal sector in KZN has grown this year.

Coetzee said the KZN economic landscape is still characterised by dwindling formal sector employment and urbanisation.

“People are absorbed by the informal sector and are mainly involved in trade. Very few of the new [formal] jobs go to the unemployed. New entrants are more prevalent in the formal sector.”

He warned that there is a limit to the absorption capacity of the informal sector.

“The informal sector then becomes more important from the municipalities’ point of view. They can’t be ignored by municipalities.”

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