Unemployment climbed to 25.7 % in the second quarter, with the manufacturing, mining and trade sectors taking the largest knock in terms of job losses, Statistics South Africa (Stats SA) reported in its ‘Quarterly Labour Force Survey' released on Thursday.

The second quarter, which runs from April to June, saw an increase of 0.7 percentage points from the 25% unemployment rate in the first quarter of the year.

Most of the job losses were in the manufacturing industry, which accounted for 68 000 job losses, followed by mining, which shed 31 000 jobs, and the trade sector, which lost 18 000 jobs. Formal sector employment contracted by 21 000 jobs.

Improvements in these sectors would remain a challenge as long as disruptions continued as a result of industrial action by trade unions, and the strength of the rand, Econometrix director and chief economist Dr Azar Jammine told Engineering News Online. “This and other factors will continue to inhibit the desire of employers to take on more workers.”

Despite the country’s labour force increasing by 181 000 to 17.7-million during the quarter, an increase of some 7 000 people, the number of unemployed increased by 174 000 between the two quarters.

The increase in the labour force was indicative of the fact that unemployment remained virtually unchanged between the two quarters, Stats SA said.

The biggest increase in the unemployment rate, between the two quarters, was observed in the North West with a 2.3 percentage point increase to 27.3%, the Eastern Cape with a 2 percentage point increase to 28.9%, Limpopo with a 1.8 percentage point increase to 21.1% and Gauteng with a 1.3 percentage point increase to 28.2%.

The Nedbank Economic Unit said employment creation was likely to remain slow during the year, on the back of a hesitant and fragile economic recovery, as well as ample spare capacity.

On the upside, the country’s finance and transport sectors experienced job gains of 73 000 and 50 000 respectively, and the number of discouraged work seekers declined by 16 000 over the quarter, after rising by 73 000 in the first quarter.

Further, employment in the informal sector increased by 34 000 jobs.

While trends in this sector remained uncertain, Jammine said growth in the informal sector could be attributed to the economy growing at a reasonable pace over the last six months and the reluctance on the part of formal sector employers to take on more workers.

He believed that improving the country’s employment figures was possible, based on government dealing with three major structural impediments to job creation.

The first was improving education and skills development in such a way as to make new job entrants more employable, followed by improving the labour market environment and labour legislation, which employers see as unattractive. Thirdly, he advocated for attention to the development of small business activity.

Meanwhile, the Nedbank Economic Unit said the Reserve Bank's Monetary Policy Committee would probably maintain its neutral stance into early 2012.