SA’s unemployment rate falls to 25%

South Africa’s unemployment rate declined to 25% in the second quarter as the government and the construction industry added more workers.

The jobless rate fell from 26.4% in the previous three months, Statistics South Africa said in a report released on Wednesday in Pretoria. The median estimate of seven economists surveyed by Bloomberg was 26.5%. The number of people without jobs decreased by 305,000 to 5.23 million.

South Africa has struggled to boost employment since a 2009 recession and has the highest jobless rate of 65 emerging markets tracked by Bloomberg. Falling commodity prices and rising wage demands are curbing work opportunities, with at least seven listed mining companies announcing plans in the past two months to cut as many as 10,000 jobs.

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“We expect South Africa’s unemployment rate to remain persistently high in the absence of any meaningful improvement in the economy and productivity,” Jeffrey Schultz, an economist at BNP Paribas Cadiz Securities, said in an e- mailed note to clients before the data was released.

Economic growth will probably accelerate to 2% this year, according to the government, from 1.5% in 2014, the slowest since the recession.

The number of people employed in community and social services, which includes the government, increased by 98,000 to 3.55 million. That makes it the biggest employer by industry. The construction sector added 79,000 workers, while the finance industry and manufacturing lost 31,000 jobs and 23,000 positions respectively.

South Africa’s unemployment rate will remain above 25% “unless major policy changes are implemented,” the International Monetary Fund said last month.

Former Finance Minister Pravin Gordhan announced in October 2013 that the state would curb hiring to rein in surging staff costs. After the recession, the government started increasing spending and employment to boost growth.

The unemployment rate is compiled from a household survey covering the formal and informal industries.

 — With assistance from Simbarashe Gumbo

- Bloomberg