SA unemployment rate stabilises, but key sectors shed jobs in first quarter

KEY sectors of the economy continued to shed jobs in the first quarter of this year, although employment overall edged higher, official figures show.

The figures reinforce concern that growth in the economy will be sluggish this year and highlights the difficulty the country faces in bringing down the unemployment rate of 25,2%.

The retail and manufacturing sectors shed jobs while finance and mining employment grew, according to Statistics SA’s quarterly employment survey, released yesterday.

Overall, the number of people employed in SA’s formal, non-agricultural sector rose by about 5000 to 8,4-million.

"Overall, while formal sector employment appears to have at least stabilised … the level of improvement remains very modest," Stanlib economist Kevin Lings said yesterday.

" The overall level of unemployment remains absurdly high by international and historic standards and is clearly SA’s number one economic concern."

A separate survey released by Stats SA last month found that employment in the combined formal and informal sectors of the economy fell by a net 75000 during the first quarter. That pushed the official unemployment rate up to 25,2% from 23,9% in the fourth quarter of last year.

"There’s a lot of seasonal effects in these numbers," Robert Price, an analyst at ETM Analytics, said yesterday. Temporary employment normally rises in the final quarter, as retailers add staff ahead of the holidays.

Yesterday’s figures showed 22000 job losses in the wholesale and retail trade sector, which includes hotels and restaurants.

The manufacturing sector, the economy’s second-biggest, shed 1000 jobs, despite a strong rise in production during the first quarter of this year.

"The figures confirm SA’s labour market continues to struggle," Standard Bank economist Shireen Darmalingam said yesterday.

"We expect the labour market to remain pressured in 2012 and maintain that the risks to both GDP (gross domestic product) and the labour market are to the downside," he said.

The construction industry posted a hefty increase of 17000 employees and the financial sector, the economy’s biggest, a rise of 3000. Employment in the community, social and personal service industries, which mainly reflects government employment, rose by a robust 15000.

Gross earnings fell by 4,8% in the first quarter of this year, compared with the previous quarter, a trend that bodes well for the inflation outlook.

Source: www.businessday.co.za

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