On Tuesday Stats SA releases the results of its latest quarterly labour force survey (QLFS), with economists expecting the unemployment rate for the first quarter of 2026 to have risen slightly.
The anticipated deterioration follows the easing in the jobless rate to 31.4% in Q4 of last year — the lowest reading since late 2020 — from 31.9% in Q3.
Investec economist Lara Hodes predicts 31.7% for Q1, and worse still in Q2 amid uncertainty around the global impact of the Middle East war, saying the resultant downturn in the SA economy “is likely to have deterred the hiring of new employees”.
Economists at Nedbank shared a similar view, saying the fallout from the war pitting the US and Israel against Iran would add to the pressure stemming from last year’s punitive trade tariffs slapped by President Donald Trump’s administration on several countries including South Africa.
The heightened uncertainty likely weighed on business confidence, their note said, adding the “environment appears to have encouraged firms to adopt a cautious, wait-and-see stance, delaying significant capital expenditure decisions, including hiring”.
The labour force usually expands in the first quarter on the back of new tertiary graduates and school leavers, as well as previously discouraged workers seeking to re-enter the job market with renewed optimism.
Tuesday also sees Stats SA publishing manufacturing output data for March, which likely shows the sector taking strain from the Middle East war as well, driven mainly by global oil price hikes.
Most analysts predict another annual decline after four consecutive months of contraction, including a 2.8% drop in February.
Last Wednesday businesses had to contend with a second straight month of record-high fuel increases due to the war, with the cost of petrol soaring R3.27, or 14%, to R26.63 per litre in Gauteng, and diesel surging R5.27, or 20%, to R31.18.
This was despite the state extending its R3 general fuel levy reduction for petrol and pausing a R3.93 tax on diesel for another month.
“Given that diesel is the workhorse of the economy, these dramatic increases will raise transport costs for all businesses significantly,” Nedbank said.
The mining sector has fared better than manufacturing in recent months, but the March print due on Thursday is unlikely to match February’s strong 9.7% year-on-year growth, which was driven largely by base effects. - Business Day
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