South Africa’s latest unemployment figures are largely in line with expectations, but there are concerns around the country’s slowing absorption and participation rates, say Nedbank economists.
While the economy has gained traction in the past months, the momentum has come from increased global demand and the rally in commodity prices. Domestically, however, high-frequency data suggests that demand remains subdued and businesses will take time to recover from the shock of level 5 lockdown.
“Meaningful job creation will probably only resume once corporate profitability has been restored and balance sheets have been strengthened,” Nedbank said in a research note following the latest Quarterly Labour Force Survey (QFLS).
“Government can best boost labour market prospects by speeding up vaccination rates, which would go a long way in helping to improve the conditions in labour-intensive industries such as hospitality and tourism.”
Worryingly, however, the absorption and…