Unemployment rate in SA likely to rise in second quarter

It’s expected unemployment will be higher in the second quarter. This is after intense rolling blackouts and disruption caused by the floods in KwaZulu-Natal.

The official unemployment rate was at 34.5% in the first quarter. It’s expected to have gone up to about 35.4% between April and June.

The difficulties the economy experienced in the second quarter are likely to have translated into further job losses.

It’s expected that rolling blackouts and severe flooding in KwaZulu-Natal will translate to a contraction in economic growth in the quarter.

ABSA’s Senior Economist Miyelani Maluleke explains, “The floods that we saw in KZN, the load shedding that we have seen through the second quarter did severely affect economic activity and will likely actually see GDP contract in Q2. That would have put quite a bit of pressure on employment. The second concern is that even some of the temporary jobs that were created in the first quarter for the census would have started to fall away coming into the second quarter.”

Others say overall employment growth will likely be slow this year also as a result of weak business confidence.

FNB’s Senior Economist John Loos explains: “The economy is coming under pressure, it’s showing signs of slowing, interest rates are rising. We have seen the inflation surge, fuel prices rise, and we moved into tougher economic times. We have 200 basis points worth of interest rate hikes and there are another 125 basis points worth of hikes that we are still expecting in the near term. It’s high pressure for business. Business confidence has been weakening. I don’t think it’s time for one to be realistically expected employment growth.”

Statistics South Africa is expected to release the second quarter jobs numbers on Tuesday.

Unemployment rate expected to be higher in Q2:

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