Ethel Hazelhurst

The year got off to a bad start, with the loss of 51 495 jobs last month. Adcorp’s employment index, released yesterday, showed the monthly decline represented a 3.2 percent annualised fall in employment.

The figures signal that a difficult year lies ahead, as slow growth and production disruptions make jobs increasingly vulnerable. And they confirm, if confirmation were still needed, that the government’s ambitious target, of creating 500 000 jobs a year, is out of reach.

The target was set at the launch of Economic Development Minister Ebrahim Patel’s New Growth Path at the end of 2010. In the event, only 445 jobs were added to the economy in the following two years, according to Statistics SA.

Adcorp’s index showed permanent jobs were the biggest casualties last month, accounting for 80 percent of the loss.

Gina Schoeman, an Absa Capital analyst, said: “While it is typical for employment to fall in January due to the seasonal effect of the December festive spending season, it is usually temporary employment that dips. Concerning in the Adcorp numbers is the fact that the permanently employed lost the most jobs in January, particularly in the retail and mining sectors.”

She noted the decline in the mining sector was not surprising given labour unrest, poor production and an uncertain outlook. And she described job losses in permanent retail store positions as “a concern”.

“If December retail sales growth is as weak as we expect it to be when released this week (we expect 1.4 percent year on year) this may explain why fewer jobs are necessary in the retail sector,” she said.

The index, first released in January 2000, is based on recruitment statistics from Adcorp’s internal recruitment databases, numbering more than 200 000 placements a year, according to Adcorp labour market analyst Loane Sharp.

This follows data last week from Stats SA, which showed the economy shed 68 000 jobs in the fourth quarter of last year. The losses were in the formal sector (52 000) and private households (48 000), which were partly offset by 8 000 new jobs in the informal sector and 24 000 jobs in agriculture.

Business Unity SA special policy adviser Raymond Parsons said yesterday that the impact of last year’s labour unrest still had to filter through to official data. At a pre-Budget media briefing yesterday, he said the underlying trends in employment were unsustainable. “Jobs are being created mainly within the public sector.”

Public sector jobs are funded by taxpayers, and represent the largest component of the government’s current spending. Private sector jobs pay for themselves because unprofitable companies retrench.