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ECONOMIC OUTLOOK

Employment dips in SA’s non-agricultural sector — 97,000 jobs shed year on year

Employment dips in SA’s non-agricultural sector — 97,000 jobs shed year on year
Painter Emanuel Chisiya waits for work in the informal sector with about 200 other jobseekers at a road junction in Cape Town, South Africa, 24 June 2020. (Photo: EPA-EFE / Nic Bothma)

South Africa’s non-agricultural formal sectors of the economy shed 97,000 jobs between the first quarter (Q1) of 2022 and Q1 of this year, according to Stats SA’s Quarterly Employment Statistics (QES) survey. It’s the latest sign of job-shedding in an economy that is sinking under the weight of state failure.

South Africa’s economy may have posted very modest quarterly economic growth in Q1 this year of 0.4%, narrowly dodging a recession. But it did not grow at anything approaching the pace needed to prevent the job-shedding that has been a hallmark of ANC rule the past few years.  

“According to the Quarterly Employment Statistics (QES, Q1:2023) survey released by Statistics South Africa (Stats SA), total employment in the formal non-agricultural sector decreased by 21,000 in Q1 of 2023, bringing the level of employment to almost 10 million,” Stats SA said in a statement.  

That is compared with the last quarter of 2022, when the economy contracted by 1.1%. Compared with the same period last year, 97,000 jobs vanished. 

It must be noted that many economists do not regard the QES numbers as being on the bull’s-eye. The same holds true for the Quarterly Labour Force Survey (QLFS), which provides data about the unemployment rate. Even in advanced economies, such surveys are not 100% accurate.  

Still, the QES and the QLFS are gauges of what is broadly happening on the jobs front, and the Q1 2023 surveys are the latest signs of job-shedding in an economy that is sinking under the weight of state failure. The results of the QLFS published in May for Q1 showed the unemployment rate rose to 32.9% from 32.7% in the last quarter of 2022.  

Read more in Daily Maverick: Have degree, will work: Unemployed graduate crisis takes its toll on SA’s youth

Returning to the just-released QES survey, Stats SA said that the “trade industry bore the brunt of the job losses, with a decrease of 36,000 jobs. The business services sector followed closely behind, with a decline of 32,000 jobs. The transport and construction industries both experienced a reduction of 2,000 jobs in this quarter.”  

Some sectors did add jobs. Community services added 41,000 compared to the previous quarter, the mining sector added 5,000 and manufacturing 4,000. So it’s not an unremitting tale of woe.  

But the stark fact of the matter is that South Africa remains in the throes of a jobs crisis largely as a consequence of the ongoing power crisis and other elements of state failure which are slashing economic growth and creating hurdles to investment.  

“Sticky inflation and tighter financial conditions should slow global activity this year. This, along with local energy and logistical constraints, are likely to impede employment prospects. Furthermore, the lift in the local cost of doing business should weigh on profitability and wage bargaining,” Koketso Mano, FNB Senior Economist, said in a note on the data.  

Total gross earnings were 5.5% higher than a year ago but declined by 4% from the previous quarter. Mano said this signalled “constrained profit margins as the cost of doing business has lifted amid a challenging economic climate”. 

And constrained profit margins are not conducive to job creation. DM

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