Employment inches higher but manufacturing jobs fall

THE economy created 42,000 new jobs in the formal nonagricultural sector during the second quarter of this year, but there was a sharp fall in employment in manufacturing, official statistics showed yesterday.

The figures add to evidence that manufacturing, which accounts for 15% of the economy’s output, is battling as a global slowdown erodes demand for SA’s exports.

They further highlight the difficulties for the government in bringing down an official jobless rate of 24.9%, which is stoking social unrest. When people who have given up looking for work are included, the rate stands at more than 36%.

Employment rose 0.5% in the second quarter, taking the number of people with formal jobs up to 8.425-million, Statistics SA said in its June quarterly earnings and employment survey.

But manufacturing shed 9,000 jobs in that period, in step with a contraction in output. Employment in all other parts of the formal economy rose, including mining, construction, trade, and financial services. The figures showed the government was the main driver of employment, with the community and social services industry notching up a gain of 24,000 jobs.

“The uptick in employment is positive, but I don’t think it is sustainable,” Absa Capital economist Ilke van Zyl said.

“There are too many impediments for business in the private sector to create employment on an ongoing basis.”

An increase of 10,000 mining jobs during the second quarter of this year was likely to shift into a loss in the third quarter, due to spreading labour unrest, Ms van Zyl said.

Mining accounts for just 6.3% of jobs in the economy’s formal sector. Community and social services is the biggest employer, accounting for 28% of the total.

“Over the past year, SA has added 125,000 formal-sector jobs,” Stanlib economist Kevin Lings said.

“While this is a reasonable outcome, given the difficult world economic conditions, it is far below the level … required for SA to meaningfully reduce … unemployment.”

Around 500,000 people enter the labour force each year in SA.

Gross earnings paid to employees rose 1% to R352bn in the second quarter, the survey showed. Compared with the same quarter last year, gross earnings jumped 8.9%.

Ms van Zyl said scrutiny of average monthly earnings including bonuses showed that, in constant terms, they were unchanged in the trade sector after three consecutive quarters of decline. All the other sectors recorded gains in earnings in the second quarter of this year.

“This shows how the trade sector struggles to grow on a value-added basis in an environment where consumers are still relatively price sensitive,” she said.

Consumer spending, the economy’s main engine, has slowed in the face of rising inflation and slower growth in disposable income.

The employment survey published yesterday reflects responses from business, while a separate Labour Force Survey, which covers both the formal and informal sectors of the economy, is based on responses from households.

Trends in the employment survey are largely in line with the labour survey, which showed a 25,000 net increase in jobs in the second quarter, which were offset by hefty job losses in manufacturing and trade.

Source: www.bdlive.co.za

<back