Johannesburg - The bloodbath in the South African economy continued as it shed 15 000 jobs in the first quarter of this year.
Statistician-general Pali Lehohla told the media yesterday that the jobs were lost in the non-agricultural sector.
Survey details confirmed that net employment levels in the private sector decreased, with only the government adding a significant number of jobs (44 000).
Lehohla said the jobs lost in the formal sector of employment was 0.2 percent. This was a drop in formal employment to 9.2 million people.
Suffered
He said trade suffered most of the job losses in the first quarter, recording a decline of 1.8 percent, followed by transport at 1.1 percent and mining declining by 0.9 percent.
The decline in trade was driven by low numbers in employment in retail trade, hotels and restaurants.
In manufacturing, the decline was 0.7 percent and in business services it was recorded at 0.4 percent.
Lehohla said the sectors not affected by the declining numbers were community services, construction and electricity.
In trade, the 1.8 percent decline was mainly due to the drop in the number of people employed in retail trade, hotels and restaurants.
In manufacturing, the 0.7 percent decline was a drop in jobs in basic metals, fabricated metal products, machinery and equipment.
In the transport, storage and communication industry there was a drop of 1.1 percent.
Lehohla said this was mainly due to the decline in employment in land transport and transport via pipelines.
However, mining and quarrying suffered a decrease of 0.9 percent in the first quarter.
Lehohla said this was the sixth consecutive quarter mining had shed jobs following the decline of 17 000 jobs in the fourth quarter.
Lehohla said since June 2013 to March this year mining had lost a total of 60 000 jobs.
Kamilla Kaplan, an economist at Investec, said lacklustre rates of growth in both the global economy and world trade volumes, low commodity prices and the drought had amplified the effects of domestic structural constraints, to weaken activity on the production side of the economy.
She said depressed consumer confidence, muted credit growth and higher interest rates and living costs dampened activity on the consumption side of the economy.
“Employment prospects are unlikely to improve meaningfully in the coming quarters, with the economy forecast to produce barely positive growth, at best, in 2016,” she said. “In addition, recent survey evidence drawn from the retail and manufacturing confidence surveys, signals further expected declines in the number of individuals employed.”
Lacklustre
Hanns Spangenberg, an analyst at NKC African Economics, said similar to the Quarterly Employment Survey (QES) that was released in May, the latest data had an updated sample size that made historical comparison difficult.
Spangenberg said the latest QES, nevertheless, provided further evidence of the country’s lacklustre economic conditions.
“The overall decrease in employment levels in (the first quarter of this year) is consistent with the 1.2 percent, quarter-on-quarter seasonally adjusted annualised contraction in (gross domestic product in) the same quarter.
“Activity in the industrial sector declined while the trade sector experienced a significant slowdown in growth,” Spangenberg said.
The SA Reserve Bank had revised growth projections from 0.9 percent to 0.6 percent this year.
The World Bank and the International Monetary Fund have also projected less than 1 percent growth rate.
The National Treasury’s growth projections for this year have remained in a similar range.
The release of the employment figures by Statistics SA comes a month after ratings agencies gave South Africa a reprieve from a downgrade to junk status.
Finance Minister Pravin Gordhan has called on all the stakeholders to work together to grow the economy and create more jobs.
A total of 90 chief executives from top companies in the country have been working with Gordhan to re-ignite growth in the economy.
They have set up work streams and identified key areas, including small business enterprises, to jump-start growth.
The team reported recently that there was movement, but the results would only be seen in the next few months.
BUSINESS REPORT