Employment growth (2.7%y/y) outpaced by labour market growth (3.0%y/y)

  • The number of formally and informally employed persons rose to 15.1mn in Q2:14, representing a 0.3%q/q and 2.7%y/y increase. However, the labour force rose by 0.6%q/q and 3.0%y/y, to 20.2mn (fig 1). Consequently, the number of unemployed persons rose to 5.2mn in Q2:14, representing a 1.7%q/q and 3.7%y/y increase. The outcome of these trends sees the official unemployment rate rising to 25.5% in Q2:14 after having risen to 25.2% in Q1:14.

  • Job growth was most prominent in the public sector (community and social services), which added the most jobs both on a q/q (103,000) and a y/y basis (265,000) (figs 3&4). Both q/q and y/y employment growth were also buoyed by the transport sector and private households.

  • The public sector (community and social services) continues to exhibit the strongest job growth since the inception of the QLFS in Q1:08 (fig 5). Conversely, employment in the private sector has been weak and agricultural, manufacturing and trade have yet to revert to their pre-crisis levels.

  • The number of discouraged workers (who fall outside the workforce on account of the fact that they had not taken active steps to participate in the labour market during the survey period) rose 2.7%q/q, (-0.2%y/y) in Q2:14. Consequently, the expanded (unofficial) unemployment rate ticked up to 35.6% in Q2:14 from 35.1% in Q1:14.

  • 44% of those unemployed are new entrants or re-entrants to the workforce, as opposed to people who have lost or left their jobs (fig 9). This is evidenced in the disproportionately high unemployment rate for the youth.

  • Those with tertiary education are more likely to find a job versus those with education levels lower than matric. The unemployment rate amongst the sample with tertiary education is around 10%, but we note that this is rising.

  • Discouragingly, structural unemployment remains elevated, with 65.8% (compared to 66% in Q1:14) of those unemployed being unemployed for more than a year.

  • We expect unemployment to rise over the next 18 months as capacity remains under-utilised, interest rates rise and strikes persist.

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