Sri Lanka creates jobs in services, industry; unemployment rate up
ECONOMYNEXT – Sri Lanka has generated close to 200,000 jobs in services and industry jobs over the past year, as agricultural workers fell, but the unemployment rate rose to 5.0 percent in the 2015 September quarter, from 4.2 percent a year earlier, official data shows.
The labour force data is based on surveys, and the statistics department says individually quarterly changes so far are not statistically significant.
The labour force, or economically active persons rose 154,184 from 8.78 million in the third quarter of 2014 to 9.00 million in the third quarter of 2015.
Those employed in the agriculture sector fell from 2.445 million in the last quarter of 2014 to 2.339 million in 2015.
Global commodity prices have fallen as the US Fed pulled back its massive money printing exercise allowing the dollar to strengthen. In Sri Lanka, tea, rubber and coconut prices have also fallen.
Some economists say a second period of ‘great moderation’ like in the 1980s may be returning.
During the Great Moderation agriculture prices fell and in the US in particular there was sweeping consolidation of small farms.
If other sectors grow during the time, people can move out from agriculture, expanding overall output and also labour productivity in agriculture itself.
When a smaller number of workers create more output their living standards also go up. In Sri Lanka’s East rice farmers are using combined harvesters like Thai farmers.
Employment in the services sector grew to 3.889 million in the third quarter up, generating 117,609 new jobs. Employment in industry grew by 72,142 to 2.253 million.
The total employed grew from 8.47 to 8.54 million but the unemployed rose to 5.0 percent from 4.2 percent with the expansion in the labour force.
The domestic labour force is also determined by the expatriate workers going to the Middle East. Oil prices are now low.
In 2014 workers remittances grew 9.5 percent, but up to September 2015, remittances have only grown 1.8 percent. (Colombo/Dec26/2015)