SA’s fluctuating statistics reflect a worrying trend

● Numbers released by Productivity SA and Stats SA paint a bleak picture of SA’s labour force and output, underlining the importance of the former in helping to raise competitiveness in SA.

In its Quarterly Labour Force Survey, released on July 30, Stats SA reported that the unemployment rate in the second quarter of 2019 rose to 29%, 1.4 percentage points higher than the previous quarter.

The number of employed people increased by 21,000 to 16.3-million and the number of unemployed by 455,000 to 6.7-million.

The informal sector recorded the largest employment gains of 114,000 people, followed by the agriculture sector with 5,000.

Compared to a year ago, employment increased by 0.2% (25,000), unemployment increased by 9.4% (573,000) and the number of persons who were not economically active increased by 3,000.

Against this backdrop, SA posted “a credible increase in the capital economy”, Productivity SA said this month.

Labour productivity and multifactor productivity recorded a decline in growth in the same period, according to its latest productivity statistics.

Productivity SA is the government entity responsible for promoting productivity and job creation. Capital and labour productivity measure the efficiency of capital investment and employees, respectively, while multifactor productivity measures the level of technological progress and innovation.

Capital productivity increased to 1.3% in 2018 from 0.7% in 2017.

A rise in labour input coupled with a drop in real output caused labour productivity to fall to -0.9% in 2018 from 0.4% in 2017. Multifactor productivity declined to -0.4% in 2018 from 1.7% in 2017.

Productivity SA publishes productivity statistics annually to help understand current and historical developments in resource efficiency and innovation in production. Productivity SA chief economist Leroi Raputsoane said: “The statistics … help the government, business, workers and the general public to assess the ability of the economy to efficiently combine inputs to produce goods and services with the aim to contribute to the wellbeing of South Africans.”

Measuring productivity helped the government and policymakers to determine appropriate policy interventions with the aim of enhancing productivity and competitiveness, he said.

“It also helps enterprises to track changes in business performance, production costs and the efficiency of production inputs as well as the labour federations to negotiate wages, among others.”

Meanwhile, SA’s competitiveness ranking dropped three places from 53rd in 2018 to 56th out of 63 countries in the IMD World Competitiveness Yearbook: 2019. In 2005, it was ranked 37th, said Raputsoane, speaking on CNBC Africa’s Power Lunch in June.

He attributed the drop to weakness in the economy, infrastructure problems and government inefficiency.

The main challenge, Raputsoane said, was for the government to be much cleaner and to run more effectively.

In the World Economic Forum Global Competitiveness Index 2019, SA improved seven places from 67 to 60.

SA’s ranking dropped from 53rd in 2018 to 56th

Leroi Raputsoane