30 Oct 2017
Labour update: Unemployment rate remained unchanged at 27.7% in Q3.17
In Q3.17, the unemployment rate remained unchanged at 27.7% for the second consecutive quarter and therefore remained at the highest level since 2003.
- In Q3.17, the unemployment rate remained unchanged at 27.7% for the second consecutive quarter and therefore remained at the highest level since 2003.
- In Q3.17, although the number of employed individuals increased by 0.6% q/q and 2.3% y/y to 16.2mn the number of job seekers increased by 0.5% q/q and 5.7% y/y to 6.21mn yielding the unchanged unemployment rate.
- On a quarterly basis the employment gain of 92 000 was spread between seven of the ten industries. The largest q/q job gains occurred finance, government, transport and trade of 68 000, 56 000, 34 000 and 21 000 respectively.
- The annual gain of 358 000 jobs was mainly driven by finance, government and trade where employment levels rose by 140 000, 117 000 and 88 000 respectively.
- The construction and agriculture industries saw reduced employment levels on both a quarterly and annual basis.
- The expanded unemployment rate, which includes the discouraged, rose to 36.8% in Q3.17 from 36.6% in Q2.17 and from 36.2% in 2016. Youth (15 – 34 years) unemployment remained elevated at 38.6%.
- SA’s growth forecasts were recently lowered by the SARB and National Treasury as well as by the major international authorities. Across the board, growth is expected to remain below 1.0% in 2017 and is projected to rise only gradually towards 2.0% over the next three years.
- Recent indicators have confirmed a strengthening in the global economy and commodity prices have stabilised at higher prices relative to decade lows reached in 2016. Although the global backdrop should provide some support, a sustained lift in the domestic economy will rely on a recovery in confidence levels that to a large extent are being depressed by persistent policy uncertainty.
- Effective policy implementation and policy certainty are required to restore confidence and enhance the investment climate which would ultimately lift potential GDP growth and therefore employment rates. However, Moody’s recently cautioned that “in the run up to the elections the commitment to difficult (and hence less popular) reforms aimed at promoting growth (…) has been weakening.”