South Africa’s unemployment rate for the third quarter of 2017 was unchanged at 27.7%.
“But it remains at an unacceptably high level,” said economist Raymond Parsons of NW University.
“The economy is in a ‘low growth trap’ and unable to create jobs on a sufficient scale to make a positive difference. SA needs a growth rate of about 3%, not 0.7%, to begin to make a serious dent in unemployment, for which a major recovery in business confidence is needed to reach that goal.
“The employment outlook remains uncertain in the face of the negative impact of the recent MTBPS (mini-budget) and the threat of further credit rating downgrades.
“If these developments reinforce the ‘private investment recession’ SA is currently experiencing, the jobs outlook remains poor. As many thousands of learners presently write their matriculation exams, regrettably their job prospects in 2018 also look bleak.”
Investec’s Kamilla Kaplan said: “the largest quarter on quarter job gains occurred in finance, government, transport and trade.
“The construction and agriculture industries saw reduced employment levels on both a quarterly and an 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.””