According to Stats SA, formal (non-agricultural) employment in SA rose by 47 000 jobs in Q1 2011; based on yesterday’s release of the Quarterly Employment Survey (QES). This follows an increase of 96 000 in Q4 2010, +23 000 in Q3 2010 and +46 000 in Q2 2010. Over the past year, SA has added a more encouraging 212 000 formal sector jobs (with 142 000 jobs added in the community sector of the economy, which is mostly represented by the public sector). The most recent data on SA employment suggests that the labour market has started to stabilise with some sectors showing signs of a modest improvement.
A breakdown of the 47 000 job gains in Q1 20100, by sector, indicates that most of the jobs were gained in the service sectors of the economy, specifically community services with a gain of 79 000 jobs (which mostly represents the public sector). There was also an encouraging, but somewhat surprising, increase in construction employment of 13 000. This increase follows 2 years of relatively sever job losses in the broad building and construction industry. In contrast, the retail sector shed a substantial 36 000 jobs in Q1 2011, while the financial and business services lost a further 16 000 jobs (see chart attached).
It is worthwhile to note that the quarterly changes in employment are not seasonally adjusted. The seasonal variation in employment can be very significant, especially in sectors such as retail trade when measured between the final quarter of the year and the first quarter of the following year.
It is also encouraging that gross earnings in the formal sector rose by reasonable 9.3%y/y in Q1 2011, although this improvement is lower than the increases recorded in most sector of the economy during 2010.
Overall, the employment situation in South Africa appears to be slowly stabilising with tentative signs of improvement; but clearly needs to be more balanced in favour of private sector employment. Off course, the overall level of unemployment remains absurdly high by international and historical standards (whether the assessment is based on the QES or QLFS survey) and is clearly SA’s number one economic concern. (See note on the need for more fixed investment spending).
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