No relenting in SA’s bleeding of jobs
Subdued economic activity and depressed business confidence constrain private sector employment growth
SOUTH Africa’s troubled economy continues to bleed jobs, with the battered manufacturing sector letting go of 13 000 workers in the second quarter of the year.
The Quarterly Employment Statistics (QES) released by Statistics SA (Stats SA) yesterday showed that employment decreased by 69 000 quarter-on-quarter to 9 748 000 in June.
The job numbers in the mining and utilities sectors also underwhelmed, with both sectors recording a loss of 2 000 jobs.
“There was a decrease of R5 billion in gross earnings from the previous quarter. The total amount of gross earnings paid for the quarter was R627bn,” Stats SA said.
The decreases in earnings were led by the business services industry with R12bn, followed by the mining industry with R699 million.
The QES differs with the Quarterly Labour Force Survey (QLFS) in that the QLFS gives South Africa’s official unemployment rate, while the QES gives a snapshot of total non-agricultural formal sector employment.
The data further showed that the highest average monthly earnings of R39 489 was paid in the electricity sector.
“Overall, labour market dynamics remain weak. Subdued economic activity, with gross domestic product (GDP) growth expected to be barely positive this year, coupled with depressed business confidence continue to constrain private sector employment growth,” said Investec economist Lara Hodes.
Much of the R50bn stimulus package announced by the president last week emphasised better planning and improved use of existing resources to boost growth and employment, especially in agriculture, mining, construction, manufacturing and tourism.
The Steel and Engineering Industries Federation of Southern Africa (Seifsa) economist Marique Kruger said the current low-growth posed a serious challenge to dealing with the unemployment crisis and effectively implementing the economic stimulus plan. “Seifsa is seriously concerned about the jobs lost in the manufacturing sector during the second quarter and eagerly looks forward to the implementation of the economic stimulus plan announced by President Cyril Ramaphosa last week,” Kruger said.
The country will soon host a jobs and investment summit aimed at bringing in new investments and boost jobs creation with unemployment currently at 27.2 percent.
“The outlook for job creation does not look promising for the remainder of 2018 as the expected rebound in GDP growth in the second half will be modest,” said NKC African Economics’ Gerrit van Rooyen.
Meanwhile, a study by Bank of America’s wealth management arm Merrill Lynch found that the broadbased weakening of South Africa’s assets since April had not dampened foreign appetite for government bonds.
“Foreign purchases (of) data from the JSE show that a deeper sell-off took place between July and September,” the firm said. “Even if the JSE recorded selling of R30bn amounted to the total net selling, foreign ownership would still be just shy of 40 percent.”