Solidarity: Business under pressure

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Johannesburg - Business activities in South Africa are under pressure despite an increase in the Solidarity-ETM SA Labour Market Index, Solidarity and ETM Analytics said on Tuesday.

“We are in an environment... where business activities is under pressure, company margins are under pressure and job and wage security on the whole is not particularly strong,” ETM Analytics head strategist Russell Lamberti said in Centurion.

“Levels of job security are approaching what we might consider to be a neutral level. It is not to say that there is a vast amount of insecurity out there but at the same time it would be unrealistic to say that job security is very strong and that wage security as a result is very strong.”

Lamberti said the index increased from 42.8 in the third quarter of 2013 to 46.1 in the fourth quarter.

He said 50 was the threshold level between rising and falling job and wage security.

Solidarity and ETM Analytics worked together for the first time and the LMI would measure job and wage security.

The index was derived from Solidarity's quarterly member survey.

The ETM Business Cycle Index remained in a downward trajectory which indicated that the economy was in a downturn period of weak economic growth and business activity, Lamberti said.

“The rand exchange rates affect our business cycles tremendously. We know that when the rand weakens significantly it has a very negative impact on our business,” he said.

“Currently what we are seeing is that South Africa is at a downturn. So we had a recovery from our recession but it never really became much more than a stabilisation phase...”

He said the index signalled that business activity was very weak.

Lamberti said job security improved but remained weak according to the Solidarity member survey but this was in line with the fact that labour security had been in a slump for the past seven years. - Sapa

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