While the South African government makes efforts to manage the rising risks of unemployment in South Africa, study shows that over one million South Africans will lose their job by 2018.
According to the report, as compiled by Unisa and Momentum, South Africa’s economic stagnation will continue to affect the country’s jobs market up to next year.
The team said that from its ‘conservative’ estimate, there is a likelihood that job losses in South Africa will climb as high as over one million mark following the nation’s stunted growth of GDP.
Weeks back, the economic forecast has it that the South Africa economy will continue to plummet as a result of the ongoing political noises which according to world leading economists, will also continue to be a brake on investment until ANC’s December electoral conference at the earliest, which should clear up the situation.
GDP growth declined from 3.3% in 2012 to 0.3 percent in 2016, and it is expected to dip below 1% in 2017 and 2018. Economists have had to constantly revise their predictions for each economic quarter of 2017 and 2018 due to this poor financial performance.
In addition to the gloom, manufacturing output will continue to decline, and the manufacturing PMI which recorded its first contraction in almost a year in June might weaken further.
The currency has also taken a hit in recent weeks following a report released by the government’s anti-corruption body.
Unisa and Momentum also found that the relationship between employment rates and GDP growth have taken a huge knock recently: the ‘production elasticity’ rates dropped from +0.7% to -0.2% in 2015, and its forecast to only crawl up to +0.3% in 2017/18.
Statistics SA also stated earlier that the March 2017 Quarterly Employment Survey (QES) shows that an estimated 9 644 000 persons were employed in the formal non-agricultural sector of the South African economy. This reflected a net quarterly decrease of 48 000 employees between December 2016 and March 2017.
This, according to the department, reflected a net quarterly decrease of 48 000 employees between December 2016 and March 2017.
Decreases in employment were led by the trade industry with 32 000 employees, the business service industry with 23 000 employees, the community service industry with 8 000 employees, the manufacturing industry with 4 000 employees and the transport industry with 1 000 employees.
The decrease in employment in these industries were reportedly due to the end of contracts for workers who were employed during the festive season.
However, it said it’s not all bad news as there were increases in employment reported in the construction industry with 12 000 employees and in the mining industry with 8 000 employees.
Meanwhile, Unisa and Momentum said the gloomy foresight of industries suggests that getting and keeping a job will get tougher in the next 18 months, and South Africans ‘should be prepared’ for unemployment in South Africa themselves
“It’s clear from available employment figures that many businesses are struggling to survive with the implication that they will on average rather shed more jobs than create more jobs
“The true cure for a self-made recession is rather political, economic and policy certainty which does not appear to be on the cards for the immediate future.”
As unemployment in South Africa grows higher, it is believed that many households will continue to feel the heat of higher expenditure without the support of income growth. Budgeting and living within means will become even more difficult.