Bad weather pushes up Sri Lanka’s unemployment in 2Q

By Chandeepa Wettasinghe
Unemployment in Sri Lanka increased in the 2nd quarter of 2016 (2Q16) to 4.6 percent from 4.2 percent recorded in the 1st quarter (1Q16) and 4.5 percent Year-on-Year (YoY), owing to severe weather conditions.

“The severe weather condition that prevailed, including a number of earth slips and floods during 2nd quarter 2016 may have had an impact on the employment and unemployment distribution of the country,” the Census and Statistics Department said.
Sri Lanka’s Gross Domestic Product (GDP) during the period also took a hit, growing just 2.6 percent, compared to 5.2 percent in 1Q16.
Unemployment levels had continued to decrease following the 3rd quarter of 2015, when unemployment spiked to a 5-year high of 5.1 percent.
The available labour force decreased to 8.19 million in 2Q16 from 8.32 million in 1Q16 and 9 million YoY. Labour force participation was at 53.3 percent, compared to 54.1 percent in 1Q16 and 54.2 percent YoY.

Males made up 53.5 percent of the labour force, and 74.9 percent of labour force participation. Just 13.8 percent of Sri Lankans between 15-19 years of age were found to be in the labour force, but unemployment rates of the age group were 22.2 percent, mainly through female unemployment. The number of Sri Lankans employed decreased to 7.82 million in 2Q16 from 7.97 million in 1Q16 and 7.89 million YoY, urging the new government to fast-track its promise of creating a million jobs by 2020.

The self-employed figures decreased to 2.47 million in 2Q16 from 2.59 million in 1Q16 and 2.76 million YoY, mainly in agriculture.
Employees in the public sector increased to 1.18 million compared to 1.17 million in 1Q16 and 1.35 million YoY. Furthermore, employee increases in the public sector will be likely in the 4th quarter due to the Right to Information Bill providing employment for over 8,000 as information officers in government agencies, at the cost of taxpayer money, in the name of increasing transparency. Possibly showing a dampening level of innovation and entrepreneurship, the number of employers declined to 227,469 from 232,207 in 1Q16 and 262,925 YoY, mainly in non-agriculture sectors, while employers in agriculture rose marginally.

The number of employees in the private sector declined to 3.33 million from 3.34 million in1Q16 and 3.59 million YoY, with decreases in both agricultural and non-agricultural sectors.
Employment in agriculture edged down to 1.96 million, or 25.1 percent of total employment, from 2.27 million or 28.5 percent in 1Q16 and 2.28 million or 28.9 percent YoY.

The industrial sector increased its employment levels to 2.12 million, or 27.1 percent of total employment, from 2.07 million or 26 percent in 1Q16, and 2.01 million or 25.5 percent YoY. Employment levels in industry, which the government is hoping to primarily boost, have been increasing the past 9 months.

Services increased its employment levels to 3.73 million, or 47.8 percent of the employed pool, from 3.63 million or 45.5 percent in 1Q16 and 3.6 million or 45.6 percent YoY.