South Africa’s official unemployment rate rose to 33.6% in the second quarter as employment declined and another 345,000 people joined the ranks of the unemployed.
Statistics South Africa reported that the number of unemployed people increased to 8.5 million between the first and second quarters.
Employment fell by 16,000 to 16.7 million, pushing the unemployment rate up from 32.7%.
Community and social services loses 57,000 jobs
Community and social services recorded the largest employment decline during the quarter, losing 57,000 jobs.
Mining shed 26,000 jobs, while manufacturing and agriculture each lost 15,000.
Two sectors recorded employment gains. Trade added 70,000 jobs, while construction gained 39,000.
Formal-sector employment declined by 41,000. Informal employment increased by 34,000.
Factory output falls for eighth month
The unemployment figures coincided with another weak manufacturing report.
Factory production fell by 1.7% year on year in June. This marked the eighth consecutive month of annual decline, dating back to November.
Food and beverage production contracted by 3.9%.
Output from the wood, paper, publishing and printing division fell by 8.9%.
Manufacturing improves slightly from May
Seasonally adjusted manufacturing production increased by 0.9% between May and June.
The quarterly and half-year figures still pointed to sustained pressure across the sector.
Factory output fell by 1.5% during the three months to June compared with the previous three months.
Production during the first half of the year was 1.7% lower than during the same period a year earlier.
Production and employment figures tell a wider story
The manufacturing and labour reports measure different parts of the economy.
Falling factory output should not be treated as the direct cause of manufacturing job losses. Together, the figures show a sector struggling to achieve sustained growth in production or employment.
Investec Wealth & Investment International strategist Osagyefo Mazwai said employment growth continued to fall behind growth in the labour force.
“Stronger economic growth alone will not be sufficient to meaningfully reduce unemployment over the long term,” he said.
Manufacturing weakness affects other sectors
Manufacturing supports supply chains across logistics, mining, agriculture and retail.
The sector also provides semi-skilled and skilled employment, which makes its continued weakness important for South Africa’s broader jobs outlook.
The latest figures show the challenge facing an economy where the labour force is growing faster than the number of available jobs.
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