SA UNEMPLOYMENT RATE HAS EASED DOWN, BUT JOB CREATION IS STILL BELOW PRE-COVID19 LEVELS
National unemployment rate declined from 34,5% in the first quarter to 33,9% in the second quarter and 32,9% in the third quarter of 2022. This quarter’s unemployment rate is the lowest level of unemployment rate in six quarters and the notable change in the unemployed suggests that efforts have been made thus far in reviving the job market.
While the easing of the unemployment rate is an encouraging trend, the contrary can be said with the employment trend which is still below the pre-Covid19 level of 16,3 million. However, the number of employed persons increased by 204 000 to 15,8 million for the quarter.
In the fourth quarter of 2022, business confidence is expected to remain below the neutral50-level for the sixth consecutive quarter decreasing to 38. This is an indication of how much businesses have been impacted and how employment creation has been sluggish due to hostile labour market conditions.
Figure 1: SA unemployment rate
Source: StatsSA, QLFS, 2022Q3
DURBAN UNEMPLOYMENT RATE DECREASEDWHILE THE SIZE OF THE LABOUR FORCE REDUCED
According to StatsSA’s Quarterly Labour Force Survey (QLFS) publication for 2022Q3, the City’s official quarterly unemployment rate decreased to 21,8%. Expanded unemployment decreased by 3,2 percentage points from 37,9% in 2022Q2 to 34,7%. This decrease is a result of the adjustment in the labour force as people moved from the ‘unemployed’ and ‘employed’ category to the ‘not economically active’ category between2022Q2 and 2022Q3.
While the number of employed people has increased nationally in the third quarter of 2022, it decreased by 2 000 to 1 224 000 for Durban. The absorption rate decreased by 0.4 of a percentage point to 47.1% and the labour force participation rate was lower as a result of these movements decreasing by 1.0of a percentage point to 60.2%.
The number of unemployed people in the City decreased by 14 000 to 342 000 and discouraged work-seekers also decreased by 81,000 to 273 000 in the third quarter. According to StatsSA, the “not economically active” for reasons other than discouragement increased by 114,000 to 762 000 due to an influx of students. This is the highest recorded in nine quarters.
Figure 2: not economically active
Source: StatsSA, QLFS, 2022Q3
Of the six sectors that recorded job increases, the highest job gains were recorded in the manufacturing, trade, and construction sector at a national level. The trade sector (the biggest employer accounting for 21,2 % of Durban’s employed people) has been keeping Durban afloat in recent months. The trade sector is also expected to benefit from the recently launched Oceans Umhlanga Mall, in which retailers over the next few months will employ more Durbanites than those already employed.
YOUTH REMAINED IN THE RANKS OF THE “NOT ECONOMICALLY ACTIVE” CATEGORY
While unemployment declined in the third quarter of 2022, youth aged 15-24 and 25-34 recorded the highest unemployment rates of 59.6% and 40.5% respectively; contributing to the increase in the “not economically active” population. Youth continue to be vulnerable and sidelined with an unemployment rate greater than all other age categories. The majority of youth is likely to be unemployed or “not economically active” due to tough economic conditions.
While the unemployment rate fell and six sectors created jobs amid prevailing economic headwinds (i.e. load shedding, frequent labour strikes) there are more jobless people now in SA than before Covid19. Investment opportunities have been lost in the process and this has been a constraint to job creation. Youth unemployment remains a concern and chances of finding a job have become slim. There is still a need for strategies and interventions that address the economy and clear approaches that focus on joblessness, inclusive hiring, and sector support which could mean a better outlook for the 2023 labour market.