Unemployment hits 3-year low in 1Q
Sri Lanka’s unemployment rate fell to 4.1 percent in the first quarter of 2017 (1Q17) recording a three-year low, with most jobs being created in the country’s industrial sector, according to the Department of Census and Statistics (DCS).
The last instance when unemployment reached such a level was in the first quarter of 2014 with a rate of 4.1 percent as well.
The fall in unemployment during 1Q17 happened concurrent to massive supply-side disruptions, which pushed inflation up to upper single digits—due to a lower base effect as well—and reduced economic growth to 3.8 percent compared to 5.5 percent in 1Q16.
The number of unemployed individuals in Sri Lanka was 352,875 in 1Q17, compared to 349,686 year-onyear (YOY).
The absolute increase in the number of unemployed was due to an increase in the country’s working-age household population to 15.7 million in 1Q17, up 0.3 million YOY.
“This may be due to the increase in net migration (the highest over the past 10 years) and internal movements such as resettlement of population from institutions to households,” the DCS said. The labour force participation rate was 54.7 percent in 1Q17, indicative of a labour pool of 8.58 million.
Of the 8.23 million employed in 1Q17, 45 percent or 3.7 million people were in the services sector, which contributed 52.3 percent towards the country’s gross domestic product (GDP) during the quarter. The services sector employment increase was 2.1 percent YOY compared to a 4.9 percent YOY increase in contributions to the GDP.
The largest increase in employment was witnessed in the industrial sector, which absorbed 2.31 million or 28 percent of the labour market, up 11.5 percent YOY. Industries comprised 30.8 percent of GDP in 1Q17, expanding 8.3 percent YOY.
The agriculture sector, which was most affected by the weather anomalies, employed 2.22 million individuals or 27 percent of the labour pool, down from 2.27 million YOY. The sector’s contribution to GDP was around 7 percent, with the 1Q17 growth at 1.9 percent YOY.