South Africa’s unemployment rate improved to 24.7% for the third quarter of the year, Statistics South Africa (Stats SA) said on Tuesday.

This was as a result of an increase of 308 000 in the number of employed individuals, while the number of unemployed individuals declined by 114 000. The number of discouraged work seekers decreased by 125 000, with the expanded unemployment rate having declined to 35.6%.

South African Chamber of Commerce and Industry (Sacci) CEO Neren Rau stated that the chamber welcomed the slight drop in unemployment and was hopeful that this trend could be sustained to build a more inclusive economy.

“Policy interventions like the Employment Tax Incentive should help to strengthen this trend, provided its scope of application is widened,” Rau said.

According to Stats SA, the number of formally unemployed individuals – those who have actively looked for a job within the last four weeks before the survey but failed to find one – now totalled 4.6-million.

Investec pointed out that this level was higher than the 4.2-million unemployed in 2008, just before the recession.

Further, according to Stats SA, youth unemployment declined by 111 000 individuals over the past year, with the figure for unemployed individuals between the ages of 15 and 34 currently standing at 3.2-million. Of the unemployed youth, 64.3% had been unemployed over the long term.

“The failure of South Africa to reach full employment is an ingrained structural problem of poor education outcomes and insufficient job creation,” Investec said, adding that labour market and education system reform was required if unemployment was to be reduced to the global average.

“Labour market inflexibility needs to be urgently reduced, not escalated; uncertainty over property rights resolved; and the proliferation of wastage and inefficiency in service and infrastructure provision, particularly the unnecessarily high administrative cost component, eliminated,” Investec said.

Stats SA executive manager of labour statistics Peter Buwembo further pointed out that employment levels, at 14-million, were back at the peak of the fourth quarter of 2008; however, owing to a 2.3-million increase in the working age population, the absorption rate, at 41.9%, was still below the 2008 level of 45%.

Formal sector gains in employment came in at 314 000, while the informal sector lost 39 000 jobs during the quarter.

Nedbank stated that while the rise in formal sector jobs was encouraging, it did not reflect a sustained increase in job levels.

“Subdued economic growth on the back of still weak, although improving, global conditions and lacklustre domestic output growth point towards job creation remaining generally slow in the next few quarters,” the bank said.

Quarter-on-quarter results showed that trade, finance and community services were the greatest contributors to the 308 000 net gain in employment.

Trade gained 100 000 jobs quarter-on-quarter, while community and social services gained 96 000 jobs, with 3.1-million persons employed in this sector. Finance gained 92 000 jobs quarter-on-quarter.

However, in the manufacturing, agricultural and construction sectors, 68 000, 45 000 and 2 000 jobs respectively were lost quarter-on-quarter.

Manufacturing employment declined by 60 000 year-on-year.

Meanwhile, Sacci expressed concern over the growth in public-sector employment.

“Government employment increased by 120 000 on an annual basis in the third quarter of 2013, the biggest growth item for this period that further entrenches government as the single biggest employer at 3.15-million, followed by retail trade with three-million,” Rau said.