28 000 jobs lost in construction, manufacturing, services sectors
JOHANNESBURG – At least 28 000 people lost their jobs in the construction, manufacturing and community services sectors between July and September, pushing up unemployment in South Africa 0.3 percent.
Statistics South Africa’s (StatsSA's) latest Quarterly Employment Statistics (QES) survey revealed that while formal, non-farm employment levels rose a modest 0.8 percent year-on-year, more jobs were shed during the third quarter compared with the second quarter of the year.
It said manufacturing alone lost 12 000 jobs in the third quarter, and the construction and community services sectors 11 000.
The Steel and Engineering Industries Federation of Southern Africa (Seifsa) said the growing number of job losses in the manufacturing sector during the third quarter pointed to the depressed state of the economy.
Seifsa economist Marique Kruger said despite efforts to rejuvenate industrial activities towards more employment and economic growth, the immediate future remained bleak.
“Given that the recently published real gross domestic product figure for the third quarter of 2019 confirmed a stagnant demand environment, the decrease in employment for the same period correlates with structural challenges faced by South Africa’s industrial production,” Kruger said.
“The current nondescript growth scenario poses a serious challenge to dealing with the unemployment crises. If growth continues to be subdued, likewise business and investor confidence will continue to decline, thus constricting economic activities and job creation.”
StatsSA said between the third quarter of 2018 and the third quarter of 2019, a total of 78 000 jobs had been created, representing 0.8 percent of jobs created. The trade sector added 17 000 positions, thus preventing a larger slide in the quarterly job-loss toll. It said this was mainly due to increases in employment in hotels and restaurants and the retail trade.
Investec economist Lara Hodes said job losses would weigh heavily on household incomes. “Overall, domestic labour market conditions continue to remain sluggish, with weak economic growth prospects weighing on consumer and business confidence, detracting from critical fixed investment in the economy,” Hodes said.
“Job losses serve to aggravate the financial pressure many households are already experiencing, against a muted economic background.”
The QES also provided detail on wage developments across sectors, showing that compensation (gross earnings) of employees increased 1.7 percent quarter-on-quarter.
The lift was largely broad-based, with only those employees within the transport and construction industries experiencing quarterly earnings cuts.