SA loses 2.2m jobs in Q2; Remgro earnings down 68%; fuel price decrease; SAA

By Claire Badenhorst

• In a report released on Tuesday by Statistics South Africa (Stats SA), the country shed 2.2 million jobs in its second quarter. While the official jobless rate fell from 30% to 23% in the three months through March, unemployment according to the expanded definition, which includes people who were available for work but not looking for a job, rose to 42% from 39.7%. According to Bloomberg, the number of people with jobs in South Africa has fallen to the lowest in nine years, even as the official unemployment rate dropped. Restrictions to curb the spread of the virus pushed the economy into its longest recession in 28 years, with GDP contracting more than expected in the second quarter. In its labour force survey for the three months to June, Stats SA found that 5.1 million more people could be classified as not economically active, pushing up the national total to just under 20.6 million. According to Reuters, the wider definitions of unemployment in the second quarter closely mirror the government’s worst-case scenario. For more details about the report, visit BizNews.com.
• Investment holding company Remgro said its headline earnings was down 68% for the year to the end of June. This was mainly thanks to the impact that lockdown measures had on some of its holdings, including, Rand Merchant; FirstRand; Distell; and RCL Foods. The company also said its dividend would fall by 53% after being adjusted downward to counteract the effects of the pandemic.
• In a presentation on Monday, the National Association of Automobile Manufacturers of South Africa (NAAMSA) asked government to reduce taxes on new vehicle purchases as part of a proposed stimulus package for the sector which has been hard-hit by the pandemic. The proposal aims to boost local sales of new cars as Covid cases threaten demand in key export markets.
• No new flights will go ahead for South African Airways (SAA) as funding discussions are still taking place between government and business rescue practitioners. The state has been given yet another extension to come up with the R10.4bn needed to save the national airline.
• Petrol prices are due to be cut next week despite a weakening in the rand. The latest projection from the Central Energy Fund is a decrease of 32c/litre in 95 petrol and a cut of more than 90c for diesel.