S.Africa’s unemployment rate accelerates to 25.2% - CNBC Africa

S.Africa’s unemployment rate accelerates to 25.2%

Southern Africa

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Employment application for,. PHOTO: Getty Images

According to an Investec report, growth in manufacturing production is also expected to slow as demand in the sector is weak.

“Seasonal considerations impacted the outcome for the first quarter of 2014. These, for instance, relate to the construction sector traditionally shedding jobs. However, the main influence on the unemployment outcome stems from the developments the wholesale and retail trade sector, as well as the government sectors, which together account for nearly half of total employment in the economy,”  Investec said in a statement.

(READ MORE: S.Africa's unemplyoment rate rises to 25.6 per cent in Q2 2013)

Manufacturing production weakened in the first quarter of the year compared to the third quarter of 2013, and the weakening momentum in production growth which was evident at the start of this year was likely to have contributed to

According to Stanlib, 71 per cent of the country’s employment came from the formal sector, 16 per cent from the informal sector, eight per cent from private households and five per cent from agriculture.

“Clearly, the latest labour market data is discouraging; with a broad range of evidence suggesting that labour market conditions are worsening, with some companies announcing jobs cuts. The on-going labour market unrest in the mining sector is not helping,” Sanlib explained in a statement.

(READ MORE: Employment and labour force still at the core of S.Africa's fabric)

Weakening household consumption expenditure also played a role in the unemployment rate deceleration, as well as having inhibited the wholesale and retail trade sectors.

The growth rate in household credit extensions decelerated to 4.8 per cent year on year from figures closer to 10.0 per cent year on year at the end of 2012.

“Overall, South Africa’s unemployment rate remains exceedingly high by global standards. Furthermore, the high rate of unemployment clearly contributes to much of the social tension and anguish experienced in South Africa on a daily basis, especially among the youth. Increasing employed in South Africa has to be the number one economic/political/social objective,” Sanlib added. 

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