During the third quarter, the economy shed 133 000 jobs while full-time and part-time employment declined even more.
The quarterly employment statistics release on Thursday shows how the South African economy continues to bleed jobs.
Total employment decreased by 2.7% over the past year, and total earnings increased by R12.2 billion to reach R966.3 billion, 2.6% higher than a year ago, according to Statistics SA.
Jee-A van der Linde, senior economist at Oxford Economics Africa, says the latest employment numbers align with the quarterly economic contraction recorded for the third quarter.
The biggest job losses were recorded in community services (-131 000), while the greatest number of job gains occurred in the trade industry (+19 000) and construction (+4 000). Compared to a year ago, the number of formal sector jobs declined by 2.7%, translating into 294 000 jobs lost.
A closer look at employment patterns shows that full-time employment dipped by 0.1% to 9.454 million, mostly in business services and trade. Compared to the same period in 2023, 44 000 full-time employment opportunities were lost, while part-time employment slumped by 119 000 jobs to 1.151 million (-250 000).
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Employment curtailed by economic stagnation and policy paralysis
Van der Linde says economic stagnation and policy paralysis continue to impede the creation of sufficient employment opportunities to absorb new entrants into the labour market and therefore contribute to continued high levels of unemployment and income inequality.
“Although South Africa’s economic prospects have improved somewhat in recent months, the persistence of large skills shortages and a lack of employment-stimulating policies suggest South Africa’s employment outlook will remain lacklustre over the medium term.”
Koketso Mano, senior economist at FNB, points out that the outlook for the South African economy has improved, with growth expected to approach 2% as early as next year. “Structural reform and related investment should support a more conducive operating environment, productivity, profitability and employment creation.
“In addition, structurally lower operating costs will be key to lowering broader inflation and lifting real incomes. The near-term gains from infrastructure maintenance and investment should be to sectors such as construction, bar any crime-related impediments, while a lower cost-of-living and rising domestic demand should support sectors such as manufacturing, trade and finance.”
Over the longer term, she says gains should be more broad-based as per capita shares gradually rise, South Africa’s attractiveness improves and innovation lifts.
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A positive picture of employment?
Dr Elna Moolman, Standard Bank Group’s head of South Africa macroeconomic research, says the labour force survey data paints a relatively positive picture on employment in the third quarter of this year and it shows that jobs were created quarter on quarter and on a year-on-year basis.
“However, it is always worthwhile keeping in mind with this data set that the data can be somewhat volatile from quarter to quarter. It is also important to keep in mind that the detail tells us that formal private sector employment outside of the agricultural sector essentially trained sideways.
“In other words, many of these jobs were created in the informal sector, and there seem to have been some jobs created by governments part-time employment programs. Therefore, the data is positive, and it is consistent with our view that economic data should generally improve from the middle of the year, but we should just keep in mind some of the detail behind this data.”
