Maarten Ackerman, Advisory Partner and Chief Economist, Citadel
The Labour Force Survey released in the beginning of August 2017 coupled with the previous week’s population release highlighted once again that job creation (and education) remains South Africa’s single biggest challenge.
The population growth rate is well above the economy’s growth rate and at the same time our matric pass rate suggests that almost 50% of children starting school don’t write or pass matric. This results in a large, under-skilled labour force.
Over the past year the unemployment rate increased by 1.1% to 27.7%.
Over the second quarter of 2017 we witnessed a 113,000 net decline in employment, with the largest losses recorded in construction (110,000) and agriculture (40,000). This is a reflection of an economy under pressure.
There were some jobs created in trade and finance, but these were not sufficient to offset the losses.
However, what South Africa needs given our current skill base is job creation in the growth engines of the country, such as mining, manufacturing and agriculture.
Unfortunately the future remains bleak if one considers all the potential job cuts announced recently by big mining companies (on the back of the mining charter and required restructurings) as well retailers such as Pick Pay – once again, this is a reflection that the economy and companies are taking strain.