SA formal sector lost a further 44 000 jobs in Q1 2015

According to Stats SA, formal (non-agricultural) employment in SA fell by 44 000 jobs in the first quarter of 2015; based on today’s release of the Quarterly Employment Survey (QES). This follows a revised increase of 39 000 in Q4 2014. Over the past year, South Africa has unfortunately lost 43 000 formal sector jobs. Overall, formal employment was recorded at 8.942 million in the first three months of 2015, which is down from the peak in 2014, but above the level of formal sector achieved prior to the start of the financial market crisis in 2008.

(At the end of 2014 Stats SA heavily revised the QES data. The new formal sector employment data series is now based on a sample drawn from the 2013 Business Sampling Frame (BSF) of Stats SA which contains enterprises registered for Value Added Tax (VAT) at the South African Revenue Service (SARS).) South Africa’s employment data is not seasonally adjusted.

A breakdown of the 43 000 (or -0,5%) jobs lost over the past year reveals that the decline was broad-based but not especially severe in any particular sector; with perhaps the exception of the construction sector. Most decreases were reported by manufacturing (-16 000 or -1.4%), construction (-15 000 or -3.0%), business services (-11 000 or -0.6%), community services (-9 000 or -0.4%) and transport (-7 000 or -1.6%). In contrast, jobs in the trade (retail) industry increased by 19 000 or 1.0%. Although government remains the largest employer in South Africa by a substantial margin, there are clear indications that it has recently curtailed hiring new workers and instead is allowing natural attrition to reduce the total labour force.

Although South Africa’s formal sector lost a further 43 000 jobs over the past year, the fall-off remains relatively modest in the context of total employment. Furthermore, the labour market has been relatively resilient despite the sharp slowdown in economic growth in 2014/2015, a decline in investment activity (private sector investment is currently in recession), a curtailment of the increase government’s budget for salaries and relatively persistent electricity outages. Nevertheless, we remain extremely concerned that the lack of job creation will lead to further social tension and discontent, and if there is a sustained decline in formal employment, the South African economy will quickly fall into recession.

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