THE UNEMPLOYMENT crisis in South Africa continued to worsen as more people lost their jobs in the non-agricultural sector during the first quarter of this year.
Data from Statistics South Africa (StatsSA) yesterday showed that thousands of jobs were lost in the three months to March, despite expectations of a rise in employment.
The quarterly employment statistics revealed that the total number of persons employed fell by 9 000 in the first quarter. This meant the total number of persons employed in the formal non-agricultural sector fell from 9 653 000 in December last year to 9 644 000 in March this year.
First National Bank (FNB) said the third wave of Covid-19 infections and the recently implemented adjusted level 4 lockdown restrictions posed a risk to output.
FNB economist Koketso Mano said full-time employment in the non-agricultural sector continued to slide, recording a -0.7 percent quarter-on-quarter contraction and a -6.5 percent year-on-year contraction in the trade, community and business services sectors, which fell 22 000 and 15 000 respectively.
Mano said although the economy remained open, trading hours and mobility remained affected and may constrain confidence in certain industries.
“Employment gains were already expected to be slow, and recent developments may further impede employment prospects,” Mano said. “As a result, household spending could also be dampened. A speedy vaccine rollout is imperative to constraining continuous resurgences of Covid-19 waves and the impact on the economy.”
StatsSA said the largest declines in employment were in the trade, business services, construction and electricity industries.
The transport industry reported no quarterly change, but the community services, mining and manufacturing industries reported an increase.
Full-time employment fell by 63 000 quarter-on-quarter, from 8.62 million jobs in December to 8.56 million jobs in the first quarter. However, full-time jobs fell significantly by 599 000 year-on-year between March last year and March this year.
Part-time jobs, on the other hand, grew by 54 000 quarter-on-quarter, from 1.02 million in December to 1.07 million in March, buoyed by community and social services, and manufacturing.
StatsSA said total gross earnings paid to employees fell by R26.8 billion, from R742.1bn in December last year to R715.3bn in March this year.
Total gross earnings decreased by R14.1bn year-on-year since March last year, with basic salaries/wages decreasing by R19.6bn in the same period.
Anchor Capital’s investment analyst, Casey Delport, said the drop in gross earnings was concerning, equating to 5.4 percent year-on-year.
Delport said the decline in gross earnings was a clear indication of the continued detrimental impact that the Covid-19 pandemic was having on the South African job market.
“Of greater concern to us is the 3.6 percent drop in gross earnings between the fourth quarter of 2020 and the first quarter of 2021. This is illustrative of the income pressures faced by South Africans across the various income groups. Further compounding this is the drop in bonus/overtime pay of 25 percent quarter-on-quarter.”
Delport said the global pandemic was also slowly changing the structure of employment in South Africa.
“Companies across the board are providing less job security in order to respond nimbly to the changing nature of the pandemic,” she said.
BUSINESS REPORT