South Africa’s second quarter unemployment rate fell to its lowest level since the first quarter of 2021, beating analysts’ expectations, as employers added jobs in sectors including construction and trade.

The official jobless rate fell to 32.6% in the three months through June from 32.9% in the prior quarter, Statistics South Africa said Tuesday in a report released in the capital, Pretoria. Economists in a Bloomberg survey had expected the jobless rate to nudge down to 32.8%.

Unemployment according to the expanded definition stood at 42.1%, which includes people who were available for work but not looking for a job, compared with 42.4% in the March quarter.

The better-than-expected outcome could be challenged in the months ahead as the economy is expected to stagnate this year because of record power cuts, lower commodity prices and logistic constraints.

The economy is experiencing its worst bout of power cuts with this year’s outages exceeding those for all of 2022, because state utility Eskom can’t meet demand from its aging and poorly maintained plants.

The central bank estimates the economy will grow at 0.4% this year, compared with about 2% had it not been for the power rationing.

The power cuts coupled with inefficiencies at the country’s freight rail network and ports have caused the cost of doing business to surge.

Shoprite, South Africa’s largest grocery chain, spent R1.3 billion ($68 million) on diesel to power generators in the financial year through July 2.

Miners and companies such as paper and pulp manufacturer Sappi have had to resort to road transport to ship their goods because of the rail-network constraints, which costs about 40% more.

South African business leaders earlier this month told President Cyril Ramaphosa that the jobless rate could rise to 38.1% by 2030 without urgent action to solve the country’s energy, logistics and crime crises. They are working to resolve the issues.