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South Africa – Jobs created in October despite difficult market conditions

11 November 2013

South Africa’s temporary job sector reported a significant jump in numbers, adding 17,297 jobs during the month of October. The informal sector created 12,249 jobs during the month, with the permanent sector reporting modest gains for the first time in 15 months, adding 10,901 jobs during the month, according to Adcorp’s Employment Index.

In total, 40,477 jobs were added to the South African Economy during October 2013. Out of the three sectors, the informal sector is rapidly growing in importance in the South African labour market, according to the Employment Index. Since January 2013, the informal sector has added 61,077 jobs, compared to a total decline of 252,675 permanent and temporary jobs. This is reflective of a shift in an unstable employment landscape.

However, Loane Sharp, Adcorp’s labour market analyst warns that, while recent Statistics SA data states South Africa’s unemployment rate is steadily dropping, conditions still remain unfavourable for job creation.

“According to Statistics SA’s report, employment has risen from 13 million at the bottom of the 2010 recession to more than 14 million in 2013 – a gain of more than 1 million jobs. However, we know that economic growth slowed from 4.0% to 1.7% per annum over the same period. Moreover, since 2008, the number of unemployed people has increased from 3.9 million to 4.6 million. At present 25% of people – and 32% of people aged between 15 and 24 – are neither in education or employment.”

“Activity in Adcorp’s recruitment databases – which represents the placement of nearly 200,000 job-seekers each year – does not reflect the growth in employment that Statistics SA indicates. As shown in last month’s report, Statistics SA reports that employment is growing at a rate of 2.8% per annum, whereas Adcorp’s otherwise closely correlated recruitment indicator suggests that employment is currently falling 3% per annum,” Mr Sharp added.    

Current data, according to Mr Sharp, still paints a bleak picture for the employed, and those looking for employment. “There can be no question that South Africa’s labour market is in crisis. Two important indicators of the cyclical health of the labour market – namely the involuntary retrenchment rate (which is at an all-time high) and the rate of voluntary job changes (which is at an all-time low) – suggest that the job market is in a deep crisis.”

The number of strikes and the number of workdays lost due to strikes and work stoppages has increased steadily in recent years.

“Just three years ago, the annual strike season lasted fewer than three months whereas now it lasts more than ten months of the year. The number of economic sectors involved in strikes has expanded greatly. A slew of economic indicators, including manufacturing and mining production, export volumes and the exchange rate of the Rand, clearly show the adverse impact of strikes,” Mr Sharp concluded.  

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