Kevin Lings, chief economist at Stanlib, explained that the modest gain was probably boosted by South Africa’s recent elections. He added that formal sector employment was now only 5, 000 jobs below the previous peak, but likely to move sideways for a while.
“According to Stats SA, formal (non-agricultural) employment in SA rose by a mere 9, 000 jobs in the first quarter of 2014, based on today’s release of the Quarterly Employment Survey. This follows a revised increase of 41, 000 jobs in the fourth quarter of 2013. Over the past year, South Africa has added 42, 000 formal sector jobs, mostly in the public sector,” Lings said in a statement.
“This is clearly far below the level of job creation required for South Africa to meaningfully reduce the rate of unemployment. More positively, South Africa has created 421, 000 formal sector jobs since the recent low in the first quarter of 2010, with job gains in 15 of the last 16 quarters. Overall, formal employment remains just 5, 000 jobs below the previous peak, which was established prior to the global financial market crisis.”
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The quarter on quarter increase in employment of 9, 000 jobs was largely due to an increase of 50, 000 in community services, which was up by 2.1 per cent and relatively modest increases in the finance industry, which was up 7,000, and construction industry, which was up 5, 000, since employment declined in every other industry.
Employment declined the most in the trade industry, which was down 34, 000, followed by mining industries, which were down 13, 000.
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“There has been a growing concern that the current fall-off in domestic economic activity will lead to broad-based job losses, thereby exacerbating the slowdown. However, today’s Quarterly Employment Survey report does highlight that there has been a loss of momentum in the rate of increase in employment, especially within the private sector, and that where there have been job gains,” Lings explained.
“[The gains] have been focused on one or two sectors, especially the community sector. Employment in some of the productive sectors of the economy, especially mining and manufacturing, is clearly under pressure.”