According to Stats SA, formal (non-agricultural) employment in SA rose by only 7 000 jobs in Q2 2011 - based on yesterday’s release of the Quarterly Employment Survey (QES). This follows a revised increase of 38 000 in Q1 2011, +96 000 in Q4 2010 and +23 000 in Q3 2010. Over the past year, SA has added a more encouraging 164 000 formal sector jobs (with 94 000 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 while the formal labour market has stabilized (reflected in the fact that the formal sector has added jobs in each of the past 5 quarters) the rate of improvement remains fairly modest, with some key sectors continuing to lose jobs (eg manufacturing has lost -18 000 over the past year).
A breakdown of the 7 000 job gains in Q2 2011 indicates that most of the jobs were gained in the service sectors of the economy, specifically business services with a gain of 22 000 jobs, and the retail trade sector (+9 000). There was also an encouraging, but somewhat surprising, increase in construction employment of 3 000. This increase follows 2 years of relatively sever job losses in the broad building and construction industry.
In contrast, the manufacturing sector shed a substantial 8 000 jobs in Q2 2011, while community services lost a significant 19 000 (see charts attached).
It is worthwhile to note that the quarterly changes in employment are not seasonally adjusted. The seasonal variation in employment can be very meaningful, 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 a reasonable 9.4%y/y in Q2 2011; although this improvement has to be measured against the fact that inflation is rising, and will probably exceed 6% in a few months.
Overall, the employment situation in the formal sector of the economy appears to have stabilized, with tentative signs of improvement; but clearly needs to be a lot more robust and more balanced in favour of private sector employment. 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 earlier notes on the need for more fixed investment spending).
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