Picture: THE TIMES
Picture: THE TIMES

SA’s high unemployment rate is likely to worsen in future even though the unemployment rate declined unexpectedly during the last quarter of 2016, Statistics SA boss Pali Lehohla said on Tuesday.

The unemployment rate dipped in the last quarter of 2016 after the number of job seekers fell by 92,000, Statistics SA said on Tuesday.

The private sector was the largest contributor to the 235,000 jobs created during the fourth quarter while government jobs accounted for about one-third. This resulted in the unemployment rate slipping to 26.5%. But this is still two percentage points higher than the fourth quarter of 2015.

This beat the Trading Economics expectation of a rise in the unemployment rate to 27.3% and the Bloomberg consensus for 27%. Unemployment had risen to 27.1% in the third quarter.

The growth in employment was driven mainly by the services industry, which grew by 73,000 jobs. Transport and manufacturing created 46,000 and 44,000 jobs, respectively.

Presenting the Stats SA quarterly labour force survey in Pretoria, Lehohla said except for mining and construction, which declined by 17,000 and 19,000, respectively, all other industries created jobs between the third and fourth quarters of 2016.

He said the research now clearly pointed to a shift towards "capital deepening" in SA, especially in the mining sector, where there was an inclination towards capital-intensive methods that replaced labour.

But while the unemployment rate improved in other sectors, SA was likely to experience further employment challenges in future.

"With the labour market that is not trained in specific skills, the unemployment situation is going to worsen unless people have skills. We have a number who are already past [the point of being] trainable."

Lehohla also highlighted the problem of children who remained in the basic education system longer than was intended. "At age 25 some have not done matric, so the challenge for training people at those ages, where the teacher might be younger than them, becomes very interesting."

The expanded unemployment rate, which included those who wanted to work but did not look for work decreased by 116,000 people. This saw a 0.7 of a percentage point decline in the rate to 35.6%. Lehohla said: "However, this is still 8.9-million persons who did not have work but wanted to work."

Youth unemployment, which includes people between the ages of 15 and 34, remains high at 37.1%, which is 10.6 percentage points above the national average.

On a quarterly comparison, the youth unemployment rate declined 1.1 percentage points.

Stats SA also found that those with education level of less than matric made up 59% of the unemployed. The unemployment rate of persons with less than a matric is 31.2%, while the unemployment rate of among graduates was 7% in the fourth quarter.

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