SA's unemployment rate hits 12-year high

Cape Town – South Africa’s unemployment rate in the first quarter of 2015 was at its highest level since 2003, according to Statistics SA, which released its quarterly labour force survey in Cape Town on Tuesday.

Statistician-general Pali Lehohla said South Africa’s unemployment level increased to 26.4%, the highest level since 2003, when it hit 30%.

“It was stable at about 24% since 2003 and this spike is a new phenomenon,” he said.

“Unemployment figures always drop in the first quarter of the year because of the impact of the festive season and Christmas, but this result is below the usual dip,” said Kefiloe Masiteng, deputy director-general in charge of social statistics.

The results of the first quarter shows that the working age population was 35.8 million, which included 15.5 million employed, 5.5 million unemployed and 14.8 million not economically active.

“Thus resulting in an unemployment rate of 26.4%, absorption rate of 43.2% and labour force participation rate of 58.6%,” said Lehohla.

Lehohla told Fin24 that the high unemployment numbers might not be the worst sign for South Africa.

South Africa’s employment rate increased by 1.8% year-on-year (y/y) to 15.5 million people.

He said the fact that there was an increase in employment created an environment of optimism. This optimism encouraged more people to ask for jobs, thus reflecting an increase in unemployment. 

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In the first quarter, the number of unemployed people was 5.5 million. The expanded unemployment rate, which relaxes the requirement for job searchers to be classified as unemployed, increased by 1.5 percentage points to 36.1%.

“Unemployment still remains the biggest problem in SA,” Lehohla said. “We also see some progression towards where we were in 2008. There is an upward trend, albeit subdued. These are important indices and need to be understood against the labour force participation and absorption rate, which is increasing.”

These results are the first using a new master sample. “Stats SA redesigned the 2007 (old) master sample in 2013 using the 2011 census data,” Stats SA explained. “The new master sample should improve the level of precision in the estimates produced.”

Lehohla said they ran parallel surveys using both samples and there was very little difference in the results, explaining that the new results can be compared to the previous results.

Lehohla earlier on Tuesday announced nominal GDP was estimated at R965bn for the first quarter of 2015, R14bn less than the fourth quarter in 2014.

South Africa’s drought had contributed to a significant drop in maize output, resulting in the negative growth rate of 16.6% in the agriculture sector.

Real GDP at market prices increased by 1.3% quarter-on-quarter, seasonally adjusted and annualised.

The largest contributions to the q/q growth of 1.3% were as follows:

• The mining and quarrying industry contributed 0.8 of a percentage point based on growth of 10.2%
• Finance, real estate and business services contributed 0.7 of a percentage point based on growth of
• The wholesale, retail and motor trade, catering and accommodation industry contributed 0.2 of a
percentage point based on growth of 1.2%.

The unadjusted real GDP at market prices increased by 2.1% y/y, Stats SA said.

The most notable performances of industries in the first quarter of 2015 compared with the first quarter of 2014 were as follows:

• The mining and quarrying industry increased by 6.3%;
• The agriculture, forestry and fishing industry increased by 6.2%;
• Finance, real estate and business services increased by 2.7%;
• The transport, storage and communication industry increased by 2.4%; and
• The electricity, gas and water industry decreased by 0.3%.

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