Elation at lower unemployment rate may be short-lived, says new report.
The country’s unemployment rate is expected to reach a turning point this year, with increasing joblessness thereafter. This is according to the latest South Africa Economic Outlook Forecast by PwC, which identified scenarios for key macro data in 2023.
The country’s official unemployment rate declined in the third quarter of 2022, to 32.9 percent and recent reports have noted an uptick in recruitment activity last year as companies started to feel more optimistic since the start of the Covid-19 pandemic.
However, PwC’s forecasts, which are based on key macro data, for 2023, predict that around 200,000 jobs will be added to the economy in 2023. In addition, the report notes that the labour market has not fundamentally changed compared to the pre-pandemic period in terms of the “quality of skills and the nature of regulation”.
The expected growth in employment over the next decade (at an average of 1.2 percent per annum) will be slower than the anticipated labour force growth rate of 1.5 percent per annum.
As a result, according to the forecast, the unemployment rate is expected to slowly increase in the years ahead.
In its 2022 report, Building skills to increase employability and staff retention, PwC noted that in order to address the country’s unemployment crisis, a social compact between government, labour, the private sector and other stakeholders would need to encompass a national skills vision that includes roles, responsibilities and expectations for every
stakeholder.
It is expected that the upcoming state of the nation address will provide more information on this social compact, which was initially expected to be completed in the first half of 2022.
