You wouldn’t expect to emerge on the other side of a national lockdown in great shape, especially one that has extended into its sixth week.
That being said, Nedbank’s latest report on how our first 35 days of lockdown will impact South Africa’s job market is still a kick to the midriff, and a reminder that the toughest times may still lie ahead.
According to BusinessTech, Nedbank’s forecast is based on “GDP calculations, past employment behaviour in the respective industries under various scenarios, as well as government information on which sectors will be allowed to operate when”.
Using those metrics, it’s predicted that 1,6 million jobs will be lost this year, with most of those occurring during the first six months.
That is particularly jarring when you consider that in the aftermath of the 2009 global recession, it’s estimated that 900 000 jobs were lost:
“What is, however, significantly different between this employment cycle and the one in 2009 is that even three years after the trough in job losses, employment still does not reach its pre-crisis peak.
“The 35-day lockdown has severely negative consequences for employment, which will take more than three years to neutralise.”
…Nedbank added that it will take much longer in this cycle for both employment and economic growth to reach their pre-crisis peak. This is owing to the depth of the 2020 contraction in GDP, it said.
“We are forecasting a 7% contraction compared to the 1.5% decline that was recorded in 2009.
The hardest hit sectors will be wholesale and retail trade, the hotel and restaurant industries, and the repair of motor vehicles, motorcycles and personal and household goods.
Together, those three areas will account for around 1,4 million lost jobs.
Engineering News reports that mining and quarrying and financial intermediation, insurance, real estate and business services industries are estimated to add 7 500 and 24 000 jobs respectively. We could also see further interest rates cuts in the months to come.
On Monday, Dondo Mogajane, the National Treasury’s director-general, speaking to 702’s Eusebius McKaiser, said that the country’s unemployment rate could reach between 30% and 40%, adding that the tourism industry is already ‘on its knees’.
For more on the plight of our tourism industry, read this.
Mogajane also added that South Africa’s economy could contract between 7% and 12% due to the impact of COVID-19.
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