SA jobs decline 119 000 in quarter with recovery to pre-pandemic levels unlikely in the near term

AS STATISTICS South Africa released employment statistics for the second quarter yesterday, which showed a 1.2% decrease over the previous quarter, economists say a jobs recovery to pre-pandemic levels may still be some way off.

According to Koketso Mano, a senior economist at FNB, commenting on the Quarterly Employment Statistics (QES), prevailing geopolitical tensions, elevated inflation and tightening global financial conditions are expected to slow the momentum in global growth.

“This, along with local energy supply constraints, is likely to impede employment prospects … Ultimately, the employment recovery to pre-pandemic levels may still be protracted in the near term, lagging the recovery in earnings.

“In the longer term, further progress on structural reform and more robust growth in private sector investment should support employment growth,” she said.

QES data yesterday revealed that the number of people employed in South Africa decreased by 119 000, or -1.2% quarter-on-quarter, from 10 067 000 in March to 9 948 000 in June.

Total employment in the country increased by 74 000, or 0.7% year-onyear between June 2021 and June 2022.

Mano said while employment was up from a year ago the recovery in employment remained incomplete, nevertheless, with employment still lower by 254 000, or -2.5%, compared to the second quarter in 2019.

The decrease in the quarter was attributed to the following industries: community services (down 100 000 or -3.4%), business services (down 15 000 or -0.6%), construction (down 13 000 or -2.4%), manufacturing (down 12 000 or -1% lower), and electricity (down 1 000 or -1.7% lower).

Job losses were lower in the community services sector, most likely linked to temporary census work.

Meanwhile, most employment gains were recorded in trade (17 000 or 0.8%), followed by mining (4 000 or 0.9%).

Mano said employment growth in trade was led by restaurants and hotels (2.5% quarter-on-quarter), highlighting the ongoing recovery in tourism.

“However, mounting consumer headwinds from higher inflation and interest rates pose a pertinent risk to consumer spending,” she warned.

Full-time employment declined by 16 000 jobs quarter-on-quarter and by 80 000, or -0.9%, year-on-year.

While the job gains in trade and mining were encouragingly full-time jobs, sectors such as business services and construction were shedding fulltime jobs, Mano said.

She said while manufacturing suffered from disruptions related to the KwaZulu-Natal flooding and intensified load shedding, the construction sector had continued a long stretch of subdued activity and job shedding has persisted.

Part-time employment decreased by 103 000, or 8.4%, quarter-on-quarter, from 1 225 000 in March 2022 to 1 122 000 in June 2022.

Annabel Bishop, the chief economist at Investec, said in a weakening economic environment, part-time employees were often the first to lose their jobs, while such employment could also be seasonal in nature.

She noted average monthly earnings paid to non-farm employees in South Africa rose 3.7% quarter-on-quarter or 4.5% year-on-year, which were not keeping pace with consumer price inflation.

Gross earnings paid to employees increased by R0.5 billion, or 0.1%, from R786.8bn in March to R787.3bn in June. The year-on-year gross earnings increased by R33.6bn, or 4.5%, between June 2021 and June 20222.