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Q1 Unemployment Figures A Preview Of Looming Jobs Bloodbath: Economists

Q1 Unemployment Figures A Preview Of Looming Jobs Bloodbath: Economists

While the South African unemployment rate has painted a grim picture for the country’s economy, economists said the first quarter’s figures are merely a preview of the jobs bloodbath expected in the months to come.

The unemployment rate for the first quarter of 2020 increased by one percentage point.

This means 7.1 million South Africans are now unemployed.

The first quarter of this year was just before the effects of COVID-19 pandemic kicked in, but the economy was already staggering in a technical recession.

That quarter’s employment statistics paint the picture of a suffering job market with heavyweights such as the finance industry, losing 50,000 jobs.

As expected, chief economist at Stanlib Kevin Lings said it would definitely get worse from here.

“We’re expecting that maybe companies had to close down, and other businesses had to reduce the number of people employed and then you would have had quite a significant fall-off in informal employment.”

He said forms of relief provided by government would not stop the loss of many jobs.

“Obviously, there is a limit to what is possible with those circumstances partly because government doesn’t have a significant amount of money to support the economy.”

Lings said he would be listening to the emergency Budget by Finance Minister Tito Mboweni for policies that would encourage economic growth.

Stats SA said between quarter four last year and the first quarter of this year, the number of employed people decreased significantly in seven of the country’s 10 industries.

Mining, trade and public household industries are the only industries to record slight increases in employment.

Community and social services and agriculture also saw a decline of 33,000 and 21,000 jobs respectively.

Chief economist at IQ Business Sifiso Skenjana said this was serious cause for concern.

“For sectors like the agricultural sector, which had a better planting season in the last three years or so, to be losing 21,000 jobs is certainly a real cause for concern.”

Meanwhile provincially, the largest decreases were recorded in the Free State, North West and the Western Cape while the largest increases were seen in the Eastern Cape, KwaZulu-Natal and Mpumalanga.