South Africa's Unemployment Rate Rises to 33.2% in Q2 Amid Weak Job Growth
To provide insight into the figures, Nkosi Pendile-Shange, economist at the Bureau for Economic Research, joined us for analysis.
'The upward trend in unemployment was somewhat expected given ongoing economic pressures, especially during the first two months of Q2,' Pendile-Shange said. 'However, the magnitude of the increase was larger than we anticipated.'
Sectors Behind Job Losses
Of the ten major sectors tracked, six recorded a decline in employment during the quarter. Notably, the utilities sector, which had previously shown growth through renewable energy projects, unexpectedly shed 6,000 jobs. The financial services sector, traditionally a key driver of employment, lost a significant 24,000 jobs. Agriculture also saw a loss of 24,000 positions, although it represents a smaller share of total employment.
'While agriculture's impact is smaller, the loss of jobs in financial services is concerning given its size relative to other sectors,' Pendile-Shange explained.
Manufacturing continued its downward employment trend, consistent with Purchasing Managers' Index (PMI) data earlier this year. However, recent data offers some optimism: manufacturing output increased in June, and early July PMI readings point to improving economic activity, which could lead to job creation in coming months.
Looking Ahead: Changes to Unemployment Data Collection
StatsSA plans to revise its quarterly labour force survey starting next quarter, incorporating new questions designed to better capture informal sector employment. This move follows comments from former Capitec CEO, Kherifa Rhee, who suggested South Africa's unemployment rate might be significantly lower if informal work was more accurately measured.
Pendile-Shange cautioned against expecting dramatic changes: 'While StatsSA is following international standards, it's important to note that many people self-report as unemployed even if they engage in informal income-generating activities. The adjustment may offer deeper insights but is unlikely to reduce the official rate from over 33% to, say, 10%.'
He added that informal employment is substantial in sectors like construction and trade, where up to a third and half of jobs, respectively, are informal, but many workers still identify as unemployed if they lack formal jobs or consistent income.
The Bigger Picture
South Africa's labour market remains under pressure amid sluggish economic growth and structural challenges. The latest data underscores the urgent need for targeted interventions to stimulate job creation, particularly in sectors that have historically absorbed large numbers of workers.
As economists and policymakers await the revised StatsSA data next quarter, the hope is that a clearer picture of informal employment will inform strategies to tackle unemployment more effectively.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Eyewitness News
7 hours ago
- Eyewitness News
Stats SA agrees to review parts of its Quarterly Labour Force Survey
JOHANNESBURG - Stats SA has agreed to review parts of its Quarterly Labour Force Survey (QLFS), a key indicator of unemployment in the country. Despite criticism earlier in the year by then-Capitec CEO, Gerrie Fourie, about its current model overstating job numbers, Stats SA said the revamp was in line with international labour standards. The statistics agency released the latest unemployment data on Tuesday, with the jobless rate rising by 0.3 of a percentage point to sit at a hot 33.2% in the second quarter. Stats SA said the revised model was set to capture a more nuanced understanding of employment trends, economic participation, and the overall labour market in South Africa. The adoption of the framework is expected to significantly alter informality data. ALSO READ: • Stats SA sounds alarm on widening gender gap as women continue to fall behind in labour force • Stats SA says 60% of industries bled jobs in the second quarter of the year The current definition of the informal sector refers to registration and size. The new resolution states that registration is the key criteria but size is no longer a required criterion. The current definition of informal employment uses medical aid and a written contract as two of the three criteria required. The new definition prioritises social insurance or access to paid and sick leave. Chief director of labour statistics at Stats SA Desiree Manamela: "We are not saying we have not been following ILO or ICLS resolutions, we have been following them but remember, things change and we change with what has been adopted in 2023." The changes are expected to be included in next quarter's data. Stats SA said that the implementation of the updated questionnaire marked a significant step forward in the effort to provide timely and relevant labour market insights for policymakers, researchers, and the public. "The benefits of implementing the new standards far outweigh the costs, enabling a more accurate interpretation of individuals' labour force situation with more detailed information on various types of labour underutilisation, people's participation in different forms of work, and the pressure they put on the labour market."
Daily Maverick
18 hours ago
- Daily Maverick
Smart IDs at your bank — and soon, from your couch
Minister Leon Schreiber's Home Affairs @ home vision moves into high gear with banking sector integration that could see you applying for documents through your banking apps and getting them delivered to your home. When Andrew Tate told UK property investor Samuel Leeds that 'every revolution in history began with the assassination of a tax man' during a YouTube interview, he was dismissing the preachings of inequality activist and former Citibank trader Gary Stevenson. It was the same energy then TymeBank CEO Coenraad Jonker channelled when he complained about the 6,500% spike in real-time identity verification prices. Minister of Home Affairs Leon Schreiber arrived at Capitec Bank's Stellenbosch head office this week with the confidence of a man who had spent a year dismantling South Africa's fragile identity verification system and rebuilding it from the ground up. 'Today, we launch the most transforming of reforms that Home Affairs has ever seen,' Schreiber told the audience, unveiling the next chapter of his department's 'apex priority', the Home Affairs @ home vision to revolutionise civic services. A fix before the future When Schreiber took office in mid-2024, the Online Verification Service (OVS) was in crisis. More than half of verification attempts failed, and response times could stretch to 24 hours, a national security risk that made banks reluctant to expand Home Affairs services. 'None of us would be standing here today if we had not had the courage to make this change,' Schreiber said. 'If we did not fix the Online Verification Service, banks would not have been willing to expand the service to many more locations.' The 1 July system upgrade cut the failure rate to below 1% and now returns results in less than a second, using modern biometrics such as fingerprints and facial recognition. Years of under-pricing at 15c per transaction had starved the system of maintenance funding. The new tiered fee, R10 for real-time and R1 for off-peak batch verifications for private sector users, created a sustainable model, even as it drew criticism. What this means for you More access, less travel: Services will expand from 30 branches to hundreds nationwide, with Capitec and FNB leading the rollout. Digital-first convenience: Future plans include applying for smart IDs and passports via banking apps, with home delivery. Security boost: Faster, more reliable verification and replacement of vulnerable green ID books with secure smart IDs. Free at point of service: Partner banks say they won't charge extra for Home Affairs transactions. Banking on digital apps The old model, limited to 30 branches across five banks, relied on costly duplication of staff and hardware inside branches. The new model integrates directly with banks' secure networks, extending Home Affairs' IT platform 'across the length and breadth of South Africa and onto smartphone apps', Schreiber said. Capitec will equip 100 branches with Home Affairs functionality by early 2026, expanding to 300 by mid-2026. The target is 1,000 branches by 2029, but Schreiber believes it can be reached sooner. Beyond the branch Schreiber's roadmap goes further. 'Once this service is stable, we will work together to enable South Africans to apply through the digital banking apps they use every day. We will add the ability to apply for a passport, and we will introduce home delivery.' He calls it the 'holy grail' of governance: a future where 'South Africans will soon be able to apply for a new document and have it delivered directly to their doorstep without ever leaving their house'. Capitec CEO Graham Lee said: 'This partnership is the first proof point of our commitment to work closely with the government and the public sector to solve real problems, remove friction for South Africans and help our country grow. By combining our technology, branch network and client-first approach with the Department of Home Affairs' mandate, we are making essential services faster, simpler and more accessible for millions from suburbs to rural areas.' Fighting fraud, enabling lives With 18 million green ID books still in circulation, 'the most defrauded document in Africa', the minister sees the partnership as key to eliminating costly fraud. 'By working together, we can urgently replace all those green IDs with smart IDs,' he said. For Capitec, the benefits go beyond goodwill. 'Identity is crucial to the ability to provide solid, secure and scalable financial services,' said Lee, who confirmed to Daily Maverick that there would be no extra charges for the service. Standard Bank signed up on Tuesday, joining Capitec and FNB. Schreiber urged all banks to 'move with the same urgency… to roll out app access and home deliveries as soon as possible'. 'We are proud to be part of this forward-thinking collaboration that will save our clients time and make it easier to access essential identity services,' said Standard Bank Personal and Private Banking CEO, Funeka Montjane. How it works for Capitec users Photo capture: If the Department of Home Affairs does not have a suitable ID photo on file, you can visit a special smart ID terminal in select Capitec branches. Biometric verification: You enter your ID number, and have your photo taken, at which point the system verifies your identity against the department's database in real time. Collection: Your smart ID will be ready for collection at the same branch within weeks. Future expansion: For even greater convenience, functionality through the Capitec app and home delivery will be introduced later. Passport renewal will be added soon. Freeing up Home Affairs Digital integration will allow officials to focus on unresolved challenges including late birth registrations, the documentation of families and even whole communities whose identities have never been recorded. 'Without these documents, people literally cannot operate in society. You can't get a social grant, a pension, a bank account or a job,' Schreiber said. The vision includes modernising birth, marriage and death registrations, and amendments, 'to digitise, automate and enable remote access for all the services we provide'. For Schreiber, the mission remains unchanged: 'To transform South Africa into a cutting-edge digital state and society where the days of exclusion, of suffering, of fraud and identity theft become things of the past.' It's the first meaningful step toward fighting inequality. DM
Eyewitness News
19 hours ago
- Eyewitness News
Stats SA sounds alarm on widening gender gap as women continue to fall behind in labour force
JOHANNESBURG - Stats SA has sounded the alarm on the widening gender gap as women continue to fall behind in the labour force. The latest concerns follow the release of the Quarterly Labour Force Survey (QLFS) for the three months through June. ALSO READ: AMANDA BLANKFIELD-KOSEFF: SA women's past achievements must pave way for a future of gender equality and social cohesion The second quarter statistics saw unemployment breach the 33% mark to sit at a worrying 33.3% with women carrying a heavier share of the burden. Stats SA said many women are concentrated in lower-skilled or semi-skilled roles, while the number of men in managerial positions is almost double that of women. The unemployment rate for women was 35,9%, compared to 31,0% for men - a gap of 4,9 percentage points. This reflects persistent gender imbalances in unemployment, labour force participation and the sectors in which men and women are employed. Stats SA said no matter the level of education, women in South Africa face significantly greater challenges in securing employment than men. Statistician General Risenga Maluleke said the gender gap is the widest between men and women with only a matric certificate. 'All I can say is that August tells a story for our women in the country, and women like young people are trudging it hard in the labour marks. Black women are more vulnerable than any other population or sex cohort.' Nearly a third of all employed women work in community and social services, followed by the trade industry, finance and private household employment. In the Q2 survey, 2,4 million people cited being a 'homemaker' as their reason for not being in the labour force - almost 90%of whom were women.
