Job growth edges higher amid gloom

Employment rose by 0.4% compared with the second quarter, when it rose by 0.6% — with 35,000 jobs created versus 40,000 in the previous quarter, Statistics SA said.

The overall trend was up because job cuts in the manufacturing and retail sector — which accounts for 35% of SA's formal workforce — were offset by growth in employment in finance and social services.

“I think we are in for some challenging times in the year ahead ... I don't think we will see robust growth in employment at all,” said Standard Bank economist Shireen Darmalingam.

“While there are pockets of strength in some of the sectors, the final quarter of this year is likely to deliver more weakness as the rapid slowing of the global economy inflicts further pain.”

Many of SA's main trade partners — the US, Europe and Britain — are mired in a recession.

SA's jobless rate rose to 23.2% in the third quarter of this year from 23.1% in the second quarter, a separate labour force survey from Stats SA showed in October. The reports do not contradict each other as the rise in unemployment stemmed mainly from a 7.1% drop in jobs within the informal sector.

Manufacturing shed 19,000 jobs in the third quarter, while the wholesale and retail trade lost 3,000 and construction shed 4,000, yesterday's official employment and earnings survey showed. This makes sense as manufacturing output and retail sales both contracted by 6.9% in the third quarter.

Finance, insurance and real estate, the economy's biggest sector, created 20,000 jobs while social and community services created 32,000 new posts.

Meanwhile, an independent survey showed that although local employers expected to hire fewer staff in the first quarter of next year, the employment outlook was still positive.

Manpower's Employment Outlook Survey said that 19% of 765 small, medium and large firms surveyed in SA forecast jobs would rise in the first quarter of next year, while 6% predicted a decrease and 73% had no intention of changing staffing levels.

Manpower SA MD Jan Coetzee said that although there had been a definite contraction in hiring over the past six months, especially for permanent positions, companies were still hiring.

Temporary positions had increased as employers were becoming even more cautious due to global turmoil. And while employers were freezing hiring, or reducing staff, companies were grabbing skilled staff.

That will probably not apply to the mining sector, which contracted by 8% in the third quarter of this year, hit by falling prices for commodities and weaker global demand.

Officials say more than 11,000 jobs may be at risk in mining, which accounts for only 5% of gross domestic product but punches above its weight in terms of job creation.

Source: Business Day

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