Unemployment edged up to 29.0% in 2Q19, from 27.6% in 1Q19. This marks the highest unemployment print to date (since the inception of the QLFS survey in 2008). We read this as a lagged effect of poor economic activity in 1Q19 (unemployment tends to have a delayed reaction to economic activity). Although there was a marginal increase in employment, this was counteracted by the rise in the number of job seekers, including new entrants into the labour market, resulting in a larger increase in the number of unemployed persons.
The largest job cuts were recorded in Mining (-12.4% y/y); Construction (-7.6% y/y); Utilities (-5.6% y/y) and Logistics (-3.1% y/y) sectors. By contrast, the Trade (+6.5% y/y); Financial Services (4.0% y/y) and Manufacturing (+2.6% y/y) sectors contributed positively to employment growth in 2Q19.
The (non-agricultural) informal sector continues to support employment while the formal (non-agricultural) sector continues to shed jobs. In fact, employment growth in the informal sector has outpaced its formal counterpart for about three years now. Moreover, employment in the household sector, such as gardening services, declined by 3.5% y/y, reflective of rising financial pressures in households.
Looking ahead, annual GDP growth is expected to disappoint relative to last year, and this will keep employment growth muted. By extension, this will continue exerting pressure on households’ income and their ability to spend.