As measured by Stats SA’s household-based Quarterly Labour Force Survey (QLFS), total employment fell by 0.4% (54 000) q/q in 2Q21 but was 5.6% (793 000) higher than the same quarter in 2020. To isolate the impact of last year’s lockdown-induced base effect, we look at the level of employment compared to 2Q19, which shows that employment was still 8.4% (1.4 million) lower.
The official unemployment rate increased (the data is not seasonally adjusted) to 34.4% in 2Q21 from 32.6% in 1Q21. The number of discouraged work-seekers rose by 5.9% q/q (34.3% y/y), while the not economically active population declined by 4.1% q/q (25.4% y/y). The expanded unemployment rate remained elevated at 44.4%.
At 37.7% in 2Q21, the employment-to-working age population ratio was still about 4.7% lower than it was in 2Q19, reflecting the ongoing slack in the economy.
Outlook: employment to lag overall economic recovery
We expect employment to lag behind the overall economic recovery amid the continued uncertainty around the pandemic. The renewed global and local supply disruptions alongside a shortage of raw materials and semiconductors, as well as higher shipping costs, imply that uncertainty remains high. This could slow the momentum of the ongoing economic recovery.
South Africa’s real potential growth had persistently moderated from an estimated growth of around 4% before the 2008/09 global financial crisis to around 0.3% in 2019. Potential growth is expected to average around 1.1% over the 2021 to 2023 forecast period. At such a low growth rate, the structural health of the economy remains dire and, as such, the economy will be unable to utilise its labour force productively. As has generally been argued, growth-enhancing economic reforms will need to be implemented to create conditions for a sustainable and higher growth path. This, along with other policy interventions related to reskilling, quality education and improved educational outcomes, should ultimately address the elevated unemployment rate.
Employment trends by sector
The QLFS data reveal that the q/q decline in total employment reflected a 375 000 decline in formal (non-agricultural) sector employment, which was moderately counteracted by the 184 000 increase in informal employment; 69 000 increase in agricultural employment and 67 000 increase in the employment by private households. On a y/y basis, however, total employment was 793 000 higher than 2Q20, reflecting the low base of 2Q20 created by lockdown restrictions that resulted in the furloughing of workers and physically restricted people from seeking work. The year-on-year growth reflected an increase across formal, informal and agricultural employment as well as private households’ employment.
The quarter-on-quarter employment outcome was mixed and reflected a 278 000 net job loss in the finance sector, a 166 000 net job loss in the community and social service sector, and an 83 000 net job loss in the manufacturing sector. Meanwhile, 143 000 net job gains were recorded in the construction sector, 108 000 in the trade sector, 66 000 in the transport sector, and 3 000 each in the mining and utilities sectors.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.