South Africa’s threatened mining sector lost 23 000 jobs in the 12 months to June, and 4 000 of those were lost between April and June.
Statistics SA’s quarterly employment statistics, released yesterday, said the information for the latest quarter was preliminary “and will be revised by the Minerals Bureau as soon as [it] receives more information from the different mines”.
The mining sector, which is one of the economy’s biggest employers, has been plagued by industrial disruption, high wage demands and confrontations between rival unions.
A volatile labour force, the high cost of extraction and uncertainty about government policy are putting mining companies under pressure.
Against this backdrop, some groups are restructuring to become more cost effective, and investment from new sources is drying up.
A recovery in gross domestic product (GDP) growth to an annualised 3 percent in the second quarter, from less than 1 percent in the first, did not spill over into the jobs market.
Overall, 7 000 jobs were added in the 12 months to June, but earlier gains were reduced when 28 000 jobs were lost in the quarter to June.
Manufacturing lost 3 000 employees in the year and even more in the second quarter. A recovery in job creation was wiped out when 5 000 employees lost their jobs in the second quarter. The construction industry shed 4 000 employees over the 12 months, 3 000 of them in the past quarter.
Even the public sector cut down. Standard Bank economist Shireen Darmalingam noted: “The crutch for job growth of late has been the community and social services sector – a proxy for public sector employment.
“However, quarter two saw a massive 13 000 jobs lost, after posting stellar growth of 31 000 in the first quarter. Job losses in this sector were the main driver of the 28 000 total jobs lost in the formal sector in the second quarter.”
The change in the pattern of public sector employment reflects the government’s commitment to cut the public sector wage bill and to avoid a large shortfall between government revenue and spending.
The February Budget targeted a gap equal to 4.6 percent of GDP. But this is likely to be an underestimate despite the second-quarter job cuts.
Some sectors reported job gains. The electricity, gas and water sector was up 1 000 jobs in both the 12-month period and the quarter. The trade sector increased employees by 1 000 in the year, but none were added in the second quarter.
News from the transport, storage and communications sub-sector was mixed: jobs were up 3 000 over 12 months and down by the same amount in the second quarter.
Stats SA said: “This was mainly due to decreases in employment in land transport and post and telecommunication.”
Financial and business services reported a year-on-year increase of 6 000 despite a quarterly decline of 1 000.
Darmalingam described the situation as “ominous”.
She noted that a net majority of respondents to the Bureau for Economic Research’s manufacturing survey reported lower employment as well as lower average factory hours worked per worker in quarter two compared with the same quarter last year.