Unemployment in South Africa has decreased a notch as the public and informal sector supported more job creation in the second quarter of the year, the latest Statistics South Africa (Stats SA) survey has found.

However, nearly half of the country’s 36-million working-age population remained ‘not economically active’, despite the 1.4 percentage point decrease in the unemployment rate from 26.4% in the first three months of the year, to 25% in the second quarter to June.

The Stats SA Quarterly Labour Force Survey (QLFS) for the second quarter of 2015 reflected a 1.8% increase in the ‘not economically active’ population, which included 2.4-million discouraged work-seekers, and a 107 000 contraction in the ‘economically active’, or labour, force population.

The survey tagged the number of persons employed at 15.7-million in the second quarter of 2015 – 198 000 more than the preceding quarter – and 5.2-million unemployed, a decline of 305 000 on the prior quarter, largely owing to the 177 000 jobs added in the informal employment sector.

While 31 000, 23 000 and 22 000 jobs were shed in the finance, manufacturing and agriculture industries respectively, large gains were made in the community and social services, construction and trade industries, where 98 000, 79 000 and 73 000 jobs respectively were created.

“Though we are pleasantly surprised at the ability of the economy to have created nearly 200 000 jobs in the second quarter, we highlight that around half of these stemmed from direct employment in the public sector,” said BNP Paribas Cadiz Securities economist Jeffrey Schultz.

The public sector had accounted for around 37% of the now more than two-million jobs created since the economy reached its trough in employment in the third quarter of 2010, he explained.

Investec economist Kamilla Kaplan added that, since the 2008/9 recession, government had been South Africa’s largest employer, while the manufacturing sector had shed jobs and employment in the mining sector remained “virtually stagnant”.

The formal sector, which accounted for the largest share of employment at 69.2%, registered employment growth of 39 000 during the three months under review.

“In the private sector, employment levels have not increased substantially since 2008 as operating conditions became increasingly challenging. The negative effects of the weak global recovery and fall in commodity prices are exacerbated by insufficient basic infrastructure,” Kaplan said.

“Depressed consumer and business confidence, weakening productivity growth in many sectors, exacerbated by rampant rises in real unit labour costs, and an increasingly hostile domestic labour market environment are all to blame here, in our view,” Schultz noted.

Further, mining houses were expected to shed jobs as commodity prices fall, pushing some operations into a lossmaking position.

“We see little scope for South Africa’s unemployment rate to meaningfully narrow much further beyond its current 25%,” he concluded.