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Despite 648 000 new jobs being created in the second quarter of 2022, employment is still 5 percent below pre-pandemic levels, says PwC’s latest South Africa Economic Outlook report.

The economy is likely to muddle along at 1,7 percent growth this year and an even slower 1.5 percent in 2023, nowhere near what is needed to absorb the 350 000 people entering the job market each year. Unemployment is almost certain to rise and that will bring threats to the social fabric of the country.

The total number of unemployed now stands at 15,56 million, which is about 95 percent of the level last seen in the fourth quarter of 2019.

Some sectors have recovered better than others: community and social services, agriculture and trade being the most notable. Worst affected are the semi-skilled and unskilled sectors: domestic workers, construction, utilities and manufacturing.

Read: Unemployment becoming a national disaster

The recovery has also been uneven across occupations. Demand for professionals, such as chemists, engineers, lawyers and doctors, is up 20% from pre-pandemic levels. Jobs for domestic workers is down 15 percent and craft and related trade jobs are down 12 percent.

SA cannot count on future economic growth to solve the country’s unskilled and semi-skilled unemployment problem, says the report. “While our estimates show that employment could grow by 200 000 per year towards 2030, we expect the labour force to grow by almost 350 000 adults per year over the same period. As a result, the country’s unemployment rate will continue to climb — and could reach 40% by 2030 under our downside economic scenario.”

The prospect of a 40 percent unemployment rate will continue to rupture the country’s social cohesion “causing an increase in societal breakdown and stability risks associated with protests and unrest,” says PwC SA’s chief economist, Lullu Krugel. “As seen in many countries globally at present, when the general population is not prospering, societies are in deep trouble. Real and felt prosperity are absolute requisites for countries or regions to function effectively.”

The skills demand has shifted over the last 10 years, with some occupations virtually unknown 10 years ago, among them cloud engineers, e-commerce managers, wellness consultants and renewable energy specialists.

Read: Inflation is much more destructive once it’s entrenched

The shadow cast by Eskom’s load shedding shows up in Stats SA figures reflecting a decline in economic activity across most industries in the second quarter of 2022, though floods in KwaZulu-Natal, the war in Ukraine and a global economic slowdown are also cited as reasons for the slowdown.

Read: The global economic outlook is getting cloudier, not clearer

Based on economic growth forecasts, PwC expects employment to reach just 16,3 million by the end of the decade.

“Private sector organisations should undertake robust workforce planning to understand the impact technology and automation has on jobs in their industry, and what this means for the skills needed by their workers in the future,” says PWC senior economist, Christie Viljoen. “Upskilling will be vital to ensuring that local industries are staffed with people who have the know-how to help drive economic growth and development. Our international research shows that, at a company level, offering training and development opportunities has a quantifiable positive impact on company financials. Specifically, these opportunities result in fewer resignations and increased profitability.”

The PwC report says the current education system is not fit for purpose to provide school leavers with the types of skills needed in the economy, and needs an overhaul. An immediate shift to lifelong learning, digital education, and new funding models for higher education are recommended. 

Borrowing from successful models in other countries, it would create a competitive market for the public and private sector, and civil society in the development of skills programmes to improve the supply and effectiveness of education.  – Moneyweb