Data released yesterday showed the official unemployment rate in South Africa declined to 32.1% y/y in Q3 2024, from 33.5% y/y in Q2 2024. Similarly, the expanded unemployment rate, which includes discouraged workers, also decreased in Q3 to 41.9% y/y, from 42.6% y/y in the previous quarter. Despite an increase in the number of discouraged worker seekers in Q3 2024, there was a significant decline in the number of unemployed persons. Notably, total employment grew by in Q3 2024 as 201,000 jobs were created compared with a year ago. The increase in employment was driven by the informal sector, where 237,000 jobs were. Formal sector employment, meanwhile, contacted with job losses of 27,000 recorded. On the whole, the rise in employment in Q3 is welcome; however, unemployment remains unsustainably high. Economic growth is slower than population growth, illustrating the need to lift South Africa to a higher sustainable growth rate to boost employment.
The day’s other economic data print was less positive, however, with the manufacturing data showing an economy plagued by a lack of underlying demand and weakness in a foundational sector. Specifically, manufacturing production contracted 0.8% y/y in September. This latest decline was somewhat surprising, especially given that September’s PMI reading jumped back into expansionary territory. Regardless of no load-shedding for nearly seven months, the manufacturing sector continues to struggle and is well off 2019 production levels. A serious shift in the industry is required to once again meet historic production levels and turn around South Africa’s path of deindustrialisation.