Jobs surprise for SA with 56 000 positions created
THE JOBS MARKET has shrugged off a poor first-quarter gross domestic product (GDP) performance and created 56 000 jobs in the first three months of this year, according the figures from the Quarterly Employment Statistics (QES).
This brought the total number of persons employed in the formal non-agricultural sector to 9.8 million.
The mining sector and the transport industry were responsible for the loss of jobs in the quarter with transport letting go of 3 000 workers.
The mining sector bled 7 000 jobs in the first quarter of the year.
The QES figures showed that the construction and manufacturing industries added 12 000 and 9 000 jobs respectively. On an annualised basis, formal non-agricultural employment increased 0.8 percent in the quarter, with 74 000 jobs added between March last year and March this year.
FNB senior economic analyst Jason Muscat said the jobs data surprised in the context of a decline of 2.2 percent GDP contraction in the quarter.
“The print, however, does not suggest that the first quarter pick up in business and consumer confidence resulted in any lift in private sector employment, and the subsequent fall in second quarter business confidence portends that there may be more job shedding in the second quarter,” Muscat said.
The jobs bloodbath in the mining sector is expected to ensue unabated.
Dual-listed Lonmin last month said that it would cut more than 3 000 jobs in the current financial year as part of its plans to release 12 600 workers in the next three years.
Sibanye Gold last year also outlined plans to get rid of 7 400 miners as it planned to restructure its loss-making Beatrix West and Cooke operations.
A report by Minerals Council South Africa, formerly the Chamber of Mines, said the industry employed 464 667 people last year, with the platinum sector accounting for 175 770 employees in the sector.
The country is host to about 80 percent of the world’s known platinum reserves.
NKC African Economics analyst Gerrit van Rooyen said job losses in key industries such as mining and trade did indeed coincide with weaker growth in these industries over the same period.
“Despite the overall improvement in formal non-agricultural employment, South Africa’s broad unemployment rate ticked higher to 36.7 percent in the first quarter, which underscores that the current rate of economic growth and employment creation is insufficient to reduce unemployment and income inequality,” Van Rooyen said.
The decline in mining production in the first quarter was a significant contributor to the 2.2 percent decline in the GDP in the first quarter. The mining sector fell 9.9 percent during the quarter, mainly due to lower production of gold, platinum group metals and iron ore.
The World Bank in April said an amicable resolution on the contentious mining charter may increase investments in the sector by 25 percent.
The draft mining charter released by Minerals Resources Minister Gwede Mantashe recently received a cool reception.
The contentious issue in it is a proposal for a 10 percent free carry for communities and staff on new projects. The differences over the sector are expected to be ironed out at the mining summit pencilled in for next month.