The official unemployment rate has decreased by 0.7 of a percentage point to 31.9% in the third quarter of the year.

This compares with the unemployment rate of 32.6% in the second quarter.

Statistics South Africa (Stats SA) finds in its latest Quarterly Labour Force Survey that the number of employed persons increased by 399 000 to 16.7-million in the third quarter, compared with 16.3-million in the second quarter.

The number of unemployed persons decreased by 72 000 to 7.8-million during the quarter.

Additionally, the number of people who were not economically active for reasons other than discouragement decreased by 160 000 to 13.1-million, while discouraged work-seekers decreased by 26 000 in the third quarter, compared with the second quarter.

This resulted in a net decrease of 186 000 in the not economically active population.

Nedbank says the drop in discouraged workers likely reflects improvements in power disruptions and lower transport costs, which likely encouraged people to search more actively for work.

Statistician general Risenga Maluleke says the expanded unemployment rate decreased by 0.9 of a percentage point to 41.2% in the third quarter, compared with the second quarter.

He adds that there have been net gains of employment every quarter for a while, with employment numbers having recovered to pre-Covid-19-levels.

Formal sector employment increased by 287 000 in the third quarter, while informal sector employment increased by 29 000. The formal sector currently accounts for 69.4% of total employment in the country.

Notably, the finance industry led with the most jobs created at 237 000, followed by community and social services with 119 000 new jobs and agriculture.

The agriculture sector employed 61 000 more people in the third quarter.

About 53 000 new jobs were recorded in the construction sector.

In contrast, employment losses were recorded in manufacturing, which lost 50 000 jobs, mining, which lost 35 000 jobs, transport, which lost 20 000 and utilities (including electricity and water), which lost 16 000 jobs.

Nedbank says job losses in mining and manufacturing reflect the sharp deterioration in these sector performances amid the drag stemming from weaker global demand, lower commodity prices, limited electricity supply and worsening logistical challenges.

In terms of geographics, KwaZulu-Natal recorded 152 000 new employment opportunities in the quarter, followed by Limpopo with 70 000, North West with 61 000 and Mpumalanga with 44 000.

Only the Free State recorded employment opportunity losses of 3 000 during the quarter.

North West nonetheless accounts for the highest percentage of unemployed persons at 51.2%, according to the expanded definition, followed by Mpumalanga at 46.6%.

KwaZulu-Natal managed to create 83 000 jobs in the trade sector and 26 000 in the community and social services sector.

Maluleke points out that, although the youth remain vulnerable in the labour market, the total number of unemployed youth (persons aged 15 to 34 years) decreased by 174 000 to 4.6-million, while there was an increase of 237 000 in the number of employed youth to 6-million.

This resulted in a decrease in the youth unemployment rate by 1.9 percentage points from 45.3% in the second quarter to 43.4% in the third quarter.

Importantly, the graduate unemployment rate decreased by 1.1 percentage points to 8.5% in the third quarter, compared with 9.6% in the second quarter.

Those with less than matric remain vulnerable with an unemployment rate of 38.8%, which is higher than the official unemployment rate.

About 3.3-million people out of 10.2-million, or 32.7%, young people aged between 15 and 24 years were not in employment, education or training as of the third quarter. This is a decrease of 1.8 percentage points compared with the third quarter of last year.

The black population group still leads with the highest number of unemployed people at a rate of 36%, which is above the official unemployment rate.

Moreover, with employment levels now having recovered to pre-pandemic level and exceeding that of the fourth quarter of 2019 by 325 000 jobs, it suggests that the labour market has normalised from the severe shocks caused by the hard lockdown in 2020, says Nedbank.

However, labour force growth continues to outpace job creation and there is a large number of discouraged workers remaining, the bank adds.

The outlook for the job market remains uncertain given the adverse economic landscape, with the obstacles to faster economic growth remaining considerable.

This while the underlying energy shortage has not been eliminated and power supply remains vulnerable to potential shocks and mishaps, Nedbank states.

Additionally, rail and port bottlenecks have worsened, which weighs on domestic trade, mining and manufacturing. Other factors such as crime, corruption and failing municipalities also constrain the output and sales of many sectors, and drive up operating costs.

Nedbank explains that altough there has been an acceleration in capital expenditure for electrical machinery and equipment, mainly driven by the need to find alternative electricity sources, this type of fixed investment does not necessarily translate into increased productive capacity, and therefore higher demand for labour.

The bank adds that further employment growth is also likely to stall as government subdues its spending amid a high public debt bill.

Nedbank expects the unemployment rate to remain structurally high over the medium term, unless faster implementation of critical structural reforms can occur, to drive robust economic growth.