Stagnant labour market from April to June says Manpower survey

South Africa's Nett Employment Outlook of 0% indicates that the percentage of employers who intend to add to their payrolls will be similar to the percentage of those who intend to reduce their workforces in the months ahead. The outlook is relatively stable in comparison to the first-quarter forecast and improves by a slight margin of two percentage points when compared to last year at this time.

Despite the cautious nature of the overall forecast, job seekers can expect to find some opportunities in the wholesale & retail trade sector, the electricity, gas & water supply sector, and the transport, storage & communications sectors. Employers in the restaurants & hotels sector, the manufacturing sector and the construction sector report the weakest second-quarter forecasts.

According to the research, raw data showed that 7% of employers planned on increasing staffing levels, 5% planned on reducing staffing levels, and 87% foresaw no change in their staffing levels during the second quarter of 2013. Once seasonal variations are removed from the data, the outlook stands at 0%.

Negative impact of labour issues

"Labour issues, which have spread from the mining industry into other sectors, such as farming, have had a negative effect on employment plans for many industries. Changes in minimum wages combined with the threat of more strikes in different sectors and anticipated changes in BEE as well as land reform policies have made many employers err on the side of caution when planning future staffing levels," said Lyndy van den Barselaar, MD of Manpower Group South Africa.

Payroll gains are forecast in six of the 10 industry sectors during Quarter 1 2013. Employers in the Wholesale & Retail trade sector report the most optimistic hiring plans with a Nett Employment Outlook of +7%. Job gains are also anticipated in the electricity, gas & water supply, the finance, insurance, real estate & business services, the mining & quarrying, the public & social and the transport, storage & communication sectors. Sectors with negative expectations include restaurants & hotels, manufacturing and construction.

"The Manufacturing and Construction sectors continue to be dogged by lower consumer demand, declining exports and cautious business spending. However, even though it is still in negative territory, The Construction sector Outlook improves seven percentage points over the previous quarter. Consumers remain careful with their money, spending less on luxuries and dining, which is impacting on the restaurants sector, while businesses and consumers cut back on travelling and holidays affecting the hotel industry. Basic services and necessities, such as electricity and water supply, continue to show growth in employment, though this may be stunted by the government's recent refusal to allow Eskom to raise rates again. The wholesale & retail trade sector continues to do well off the back of improved consumer spending," explained Van den Barselaar.

Three-point drop in manufacturing

Quarter-over-quarter, forecasts weaken in six of the 10 sectors with the most notable drops in manufacturing with an outlook three percentage points weaker than Q1 2013 and agriculture, hunting, forestry & fishing and restaurants & hotels, both with outlooks two percentage points weaker than the first quarter. Outlooks improve quarter-over-quarter in the wholesale & retail trade sector by six percentage points and in the construction sector by seven percentage points.

Year-over-year results indicate that the eight percentage point drop reported by employers in the agriculture, hunting, forestry & fishing sector was the steepest decline, followed by a six percentage point drop in the mining & quarrying sector. In direct opposition, the construction sector outlook improved eight percentage points while outlooks in the electricity, gas & water supply and transport, storage & communication sectors both improved six percentage points.

Eastern Cape fared best

Of the five regions surveyed, only employers in Gauteng (-2%) report negative hiring plans for the second quarter of the year. The Eastern Cape fared the best of all the regions with an outlook of +5%. Slow-paced hiring activity is expected in both the Free State and the Western Cape with Nett Employment Outlooks of +1%. An even flatter hiring pace is expected in KwaZulu-Natal, where employers report a Nett Employment Outlook of 0.

Quarter over quarter, outlooks decline in Gauteng and KwaZulu-Natal by two and one percentage points, respectively. The Eastern Cape is six points up on Q1 while outlooks in the Free State and the Western Cape are relatively stable.

Year over year, employers in the Eastern Cape and KwaZulu-Natal report the most improved hiring plans with outlooks improving six and five percentage points, respectively. Employers in all other regions report year-over-year declines.

"Although we would've hoped for more positive results following the holiday season consumer shopping performance, as well as some positive commitments from the government on business issues following Mangaung, businesses still seem downbeat as to future employment plans. With many factors, such as the global economy as well as upcoming policy changes in BEE and land reform expected from the government, many businesses still seem to be playing a waiting game before committing to any large-scale growth and employment plans," concluded Van den Barselaar.

The research was conducted by interviewing a representative sample of 750 employers in South Africa. All survey participants were asked: "How do you anticipate total employment at your location to change in the three months to the end of March 2013 as compared to the current quarter?" Unlike surveys that operate with hindsight and analyse the previous quarter of the year, the Manpower Employment Outlook Survey is unique in that it forecasts the future shape of the employment industry for the next quarter.