Electricity supply issues continue to weigh heavily on SA economy: Economists


Analysts anticipate that unemployment would have risen slightly in the first quarter of the year due to economic constraints and low business confidence resulting from the load shedding crisis.

Their comments come as Statistics South Africa is expected to release the Quarterly Labour Force Survey for the first quarter of this year.

The official unemployment rate decreased from 32,9% in the third quarter of last year, to 32,7% in the fourth quarter of 2022.

According to the expanded definition of unemployment, the unemployment rate remained elevated at 42,6% in the fourth quarter of 2022.

VIDEO: Unemployment numbers out on Tuesday

Load shedding is noted as having a limiting effect on economic activity and productivity.

Analysts say the accelerated implementation of key reforms remains essential to boosting confidence and accordingly, economic growth and job creation.

Economist at Investec, Lara Hodes says unemployment is expected to have risen slightly to reach 33% in the first quarter of 2023.

“Indeed the electricity supply continues to weigh heavily on confidence and economic activity inhibiting job creation. We’re anticipating GDP growth of just 0,2% this year. However, downside risks remain. The youth category which comprises those 15-34 years remains the most afflicted segment of the economy. Unemployment remains critically high in this grouping, improving the quality of and access to education remains critical in this regard. In the short term, we don’t see unemployment improving meaningfully.”

An independent labour analyst, Andrew Levy, says the outlook for employment remains bleak with many businesses struggling to keep costs down due to load shedding.

He says any reduction in the rate of unemployment would have been a result of seasonal employment which is temporary.

“Without doubt, if we see the increase that I expect we will see one of the prime movers is going to be load shedding. fFirst point is, it is not possible to run a business when you have no power for 4/8 hours a day. It’s also led to the failure of many businesses, and if we look at the slightly longer run, we’ve had COVID, and now have very extreme load shedding, and I see no prospects that that is going to change.”

Stats SA data showed that the number of unemployed persons in the country increased by 28 000 to 7,8 million in the fourth quarter of 2022, while the total number of persons employed was recorded at 15,9 million in the fourth quarter of last year.


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