Continuing strike action and the labour unrest that has occurred throughout South Africa over the last few months has had a serious impact on the confidence of the country's graduate professional market and is also believed to be part of wider political agenda.
This is according to the latest results from the PPS Graduate Professionals Confidence Index for the third quarter of 2012, a quarterly survey that tracks the confidence levels of nearly 6 000 of South Africa's graduate professionals. 71% of respondents said they believed the labour unrest was part of a wider agenda, leading up to the ANC's national elective conference in Mangaung in December.
Strike action had a serious impact
Gerhard Joubert, head of Group Marketing and Stakeholder Relations at PPS, says the conference remains top of mind for many professionals, as the outcome will essentially decide who the new President of South Africa is going to be. "The ongoing strike action has also had a serious impact on the results, with most categories surveyed recording a fall in confidence. This is not surprising as it has already had a huge impact on our economy with National Treasury estimating that the impact at the platinum and gold mines has cost the economy more than R10 billion so far this year."
He says the fact that this follows two downgrades to the country's national sovereign credit rating in the last few months, in addition to the perceived political instability, has simply eroded confidence in the image of South Africa, both at home and internationally.
The report also revealed that the confidence among professionals of remaining in South Africa for the foreseeable future fell to a new low of 76%, down two percentage points on the previous three months and five percentage points year-on-year. "This is still one of the highest results in the confidence index and is indicative of the fact that most professionals have no plans to emigrate. However, it is to be expected that the events of the past three months would have made some people consider the option of emigrating."
Equity markets a bright spot
Confidence in the economic outlook for South Africa over the next 12 months fell five percentage points since the last quarter to 55%, but a bright spot was confidence in the local equity markets, which improved by four percentage points over the same period to 60%. "The JSE has continued to hit record highs in recent months, despite all of the uncertainty in the economy, and this has translated into a higher confidence level in the future direction of the stock market. Clearly professionals believe there is still value to be had in local equities."
Confidence in the future of their profession over the next five years fell to 77% from 79% previously, while only 57% said they would encourage their children to enter their profession, from 60% last time.
Professionals also remain concerned on a number of macro-economic issues. Confidence that unemployment in South Africa will improve over the next five years fell two percentage points to 39% from last quarter, while confidence that crime rates will improve over the next five years also fell two percentage points to 41%. He says the overall confidence level in the index fell to a record low of 56%, down a marginal one percentage point from the previous quarter.
