According to the latest data from Stats SA, 121 companies were liquidated in June 2024. Of these, 104 closures were voluntary – 12 fewer than in June 2023 – while 17 were compulsory, representing a 5-case increase from the previous year.
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According to BusinessTech, despite these fluctuations, the number of liquidations in Q2 2024 decreased by 4.3%, from 391 in Q2 2023 to 374 this year.
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Over the first half of 2024, liquidations dropped by 5.4%, from 802 in the same period of 2023 to 759.
Among industries, unclassified businesses experienced the highest number of liquidations at 259, followed by financing, insurance, real estate and business services with 207 closures, and trade, catering and accommodation with 146.
In contrast, the electricity, gas, and water sector saw only one business liquidation.
Despite a decrease in liquidations compared to last year, the high number of business closures continues to hinder the creation of much-needed jobs in South Africa.
Although the Absa Purchasing Managers’ Index (PMI) rose from 45.7 in June to 52.4 in July 2024, surpassing the neutral 50 mark, the employment index fell from 46.3 to 45.4 over the same period.
Investec Economist Lara Hodes emphasised that a significant boost in business confidence and economic growth is essential to addressing South Africa’s severe unemployment crisis.
According to the latest Quarterly Labour Force Survey (QLFS), the official unemployment rate remains at a staggering 32.9%.
The data from the QLFS aligns broadly with the Quarterly Employment Statistics (QES).
While the QES focuses on formal salaried positions, the QLFS provides a broader view of employment and unemployment trends.
According to the QES, total employment declined by 67 000, or 0.6%, quarter-on-quarter, falling from 10 731 000 in December 2023 to 10 664 000 in March 2024.
This decline in total employment can be attributed to decreases across several industries:
- Trade: -57 000 jobs, or -2.4%
- Community services: -18 000 jobs, or -0.6%
- Business services: -4 000 jobs, or -0.2%
- Mining: -3 000 jobs, or -0.6%
Conversely, some industries saw job growth:
- Manufacturing: +12 000 jobs, or +0.9%
- Transport: +2 000 jobs, or +0.4%
- Construction: +1 000 jobs, or +0.2%
Full-time and part-time employment fell by 16 000 (-0.2%) and 38 000 (-3.1%) quarter-on-quarter, respectively.
There is hope that the Government of National Unity (GNU) will drive growth initiatives to boost employment.
However, with the economy projected to grow only around 1%, it may not be enough to keep pace with the population growth rate of approximately 1.5% per year.
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