According to Southern Africa Freight News article published on March 6, 2023, South Africa’s unemployment rate improved slightly in the fourth quarter of 2022, despite a sharp decline in exports produced by labour-intensive sectors according to the Stats SA’s Quarterly Labour Force Survey.
Economists at the Bureau for Economic Research (BER) reported on Monday that the official unemployment rate had edged down to 32.7% in the fourth quarter from 32.9% in the third quarter of 2022.
“The expanded rate, which includes discouraged workers, fell to 42.6% from 43.1% in 2022Q3. Total employment rose by 169 000 quarter on quarter in 2022Q4 (up 1.2 million year on year), following a gain of 204 000 jobs in the third quarter,” BER said.
“Despite these increases, total employment remains stuck below its pre-COVID level. It must be noted that the annual growth figure in particular continues to be impacted by a recovery in the response rate, which likely overstates the extent of the recovery but more accurately reflects the true state of employment than earlier estimates,” the economists said.
On a sectoral basis, finance jobs rose 103 000 quarter on quarter, private household positions increased 54 000, while trade and transport, at a 52 000 and 43 000 job gain respectively, recorded the biggest jumps in employment. However, steep job shedding was recorded for community and social services sector in which 122 000 jobs were lost.
In addition, the Absa Manufacturing PMI (Purchasers’ Managing Index) plummeted to a weaker than expected 48.8 in February 2023, down from a surprisingly robust 53 in January. The fall was primarily driven by a sharp decline in business activity (45.5 vs 56.0) and a further weakening in new sales orders (49.4 vs 49.9), amid disruptive stage six load-shedding during the month.
However, the S&P Global South Africa PMI, which, besides manufacturing also surveys selected non-manufacturing sectors, rose to 50.5 in February 2023, up from 48.7 in January, beating market expectations of 49. The above-50 reading signalled a slight improvement in private-sector business activity, mainly driven by an upward surprise in new export orders. However, purchase cost inflation accelerated for the first time in eight months, largely attributed to a weakening in the rand/dollar exchange rate.
In February, domestic vehicle sales increased by 2.6% year-on year, below the consensus of a 4.5% year-on-year improvement. However, vehicle exports declined by 11.5% for the period. Domestic vehicle sales are likely to increase relative to 2022Q4 during the first quarter of 2023.
Meanwhile, preliminary data from the SA Revenue Service showed that the merchandise trade balance swung to a higher-than-expected R23.1bn deficit in January, from a downwardly revised R4.6bn trade surplus in December 2022. The value of exports decreased by 14.4% month-on-month, primarily due to sharp reductions in the value of shipments of vehicles and transport equipment (-55%), prepared foodstuff (-34%), precious metals and stones (-31%) and machinery and electronics (-19%).
Conversely, imports rose by 2.9% month-on-month, mainly on the back of increased purchases of original equipment components (32%). In January private-sector credit extension rose to an above consensus 8.4% year on year, an improvement from the 7.7% annual expansion recorded in December 2022. Finally, SA’s monthly budget balance worsened to R88.8bn in January 2023, up from a R65.9bn deficit in the same month last year, according to data by National Treasury.
Gross tax revenue increased by 7.5% year-on-year between April 2022 and January 2023 (first 10 months of the 2022/23 fiscal year), somewhat below the revised estimate in the February Budget for the entire 2022/23 fiscal year.
