Unemployment rate rose to 30% before Covid-19 crisis hit
SA’s unemployment rate rose to 30.1% in the first three months of 2020, reaching its highest level on record, even before the advent of the Covid-19 crisis.
The rise in joblessness is up from the 29.1% seen in the fourth quarter of 2019, Stats SA said in the latest Quarterly Labour Force Survey (QLFS) on Tuesday.
Using the expanded definition of unemployed, which includes discouraged work seekers or people who have given up looking for a job, unemployment has risen to 39.7% in the first quarter, BusinessLIVE reports.
According to Stats SA, most industries experienced job losses in the first quarter, with the finance sector shedding the most jobs, followed by community and social services, agriculture and transport.
The increase in joblessness came in the months largely before lockdown measures came into effect on March 27, all but halting economic activity.
Though the economy began reopening at the start of June, the damage is expected to be deep. The Treasury is expecting a contraction of 6.4%, it emerged at the weekend, while entities such as the Organisation for Economic Co-operation and Development (OECD) expecting a bleaker contraction of 8.2% if the economy experiences a second wave of the virus later in 2020. Under this scenario the OECD expects SA’s unemployment levels to rise to 35%.
Several companies such as petrochemicals producer Sasol, retailer Edcon, mobile operator Cell C, and the state-owned SABC have announced intentions to lay-off workers.
The increase was higher than market expectations, with a Bloomberg poll of eight economists having expected unemployment to rise to 29.7%.
Stats SA noted that due to the nationwide lockdown, face-to-face data collection was suspended from March 19 at the tail end of its work for the survey. Where necessary, imputations were done, using data collected in the previous quarter.