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South African employers are cautiously optimistic for the fourth quarter 2013 in the Manpower Employment Outlook Survey.

Nationally, employers expect some opportunities for job seekers this quarter as South Africa’s seasonally adjusted Net Employment Outlook stands at +5% points. The outlook has now climbed steadily for four consecutive quarters and is now 4 percentage points stronger than the third-quarter forecast and six percentage points stronger year-over-year.

Of the 750 South African employers who participated in the fourth-quarter research, 11% expect to increase staffing levels, 6% forecast a decrease and 82% expect no change to current payrolls. Lyndy van Barselaar, MD of Manpower SA, provides insights into why the South African employment market has improved.

“Although South Africa’s outlook is affected both by national concerns, such as unrest in and pressure on certain industries, as well as international sluggishness, with Europe as one of South Africa’s chief export destinations, trade and industrial policies encourage local firms to explore new areas of growth based on improved competitiveness.

“China, India and Brazil offer significant opportunities. Infrastructure, mining, finance and retail developments across Africa are helping to fuel a growth trajectory in which South Africa can participate.”

Employers in all five regions foresee payroll gains in the imminent quarter.

Cautiously optimistic net employment outlooks of nine percent points are reported in both Eastern Cape and Western Cape, and modest hiring opportunities are expected in Gauteng where the outlook stands at five percentage points. Some workforce gains are forecast in KwaZulu-Natal and the Free State, with Outlooks of 3% and 2%, respectively.

“Positive outlooks in the provinces could be attributed to the commitment from provincial governments in the country’s drive to overcome the shortage of suitable, skilled labour, thereby contributing to higher levels of economic growth and employment and addressing poverty and inequality,” Van den Barselaar says.

Quarter-over-quarter, hiring plans strengthen in all five regions. Employers report improvements of 9 percentage points in Eastern Cape and 8 percentage points in Western Cape. Elsewhere, the Outlook strengthens by three percentage points.

Hiring prospects improve in four of the five regions when compared with 4Q 2012. The most noteworthy improvements of 11 and 10 percentage points are reported in Western Cape and Eastern Cape, respectively.

Employers in KwaZulu-Natal report an Outlook increase of 7 percentage points and hiring plans are 3 percentage points stronger in Gauteng. However, hiring intentions weaken by 3 percentage points in Free State.

Says Van den Barselaar: “The economy of the Free State province has historically being carried mainly by two sectors namely agriculture and mining, with the latter providing the greatest proportion of jobs.

“The developing economy of the province has since seen its structure shadow that of the national economy. Sectors like manufacturing and certainly services have begun to be more noticeable in the labour market, possibly responsible for fuelling the need for more labour.”

Employers in seven of the 10 industry sectors anticipate growing payrolls during the fourth quarter. The most positive hiring intentions are reported in the Agriculture, Hunting, Forestry & Fishing sector and the Mining & Quarrying sector; employers in both report Outlooks of +12%.

“Contrary to perceptions that mining pay and conditions are poor, the International Council on Mining and Metals found that mining is a relatively attractive form of employment,” Van den Barselaar says. “According to the council’s case study interviews, mining is seen as better paid and offering more fringe benefits, including housing, education and healthcare.

“These results and the fact that the Chamber of Mines announced its plans to create 20 000 jobs by 2020 all play part in the anticipated growth of this sector. Another indicator that the mining and construction sector may experience further growth is the increased attention of international business into South Africa, using South Africa as a platform for investment into Africa.

“This is evident through the announcement of the bauma Africa trade fair that is attracting 49 countries and over 700 local and international exhibitors, promoting business specifically in the SADC mining and construction sectors.”   Quarter-over-quarter, hiring prospects strengthen in nine of the 10 industry sectors. With an Outlook improvement of 18 percentage points the Agriculture, Hunting, Forestry & Fishing sector employers demonstrates the most significant of these.

Hiring prospects improve by five percentage points in three sectors – the Electricity, Gas & Water Supply sector, the Transport, Storage & Communication sector and the Wholesale & Retail Trade sector. Meanwhile, Construction sector employers report relatively stable hiring plans.

Employers report stronger hiring intentions, compared to the same quarter in 2012, in eight of the 10 industry sectors. The strongest hiring activity since Q4 2010 is expected in the Electricity, Gas & Water Supply with employers reporting a Net Employment Outlook of +9%. The Outlook is 5 percentage points stronger when compared with the previous quarter and improves by 11 percentage points year-over-year.

“The National Business Initiative plays an important part through all sectors in developing skills in the various provinces. With initiatives like the Gauteng Department of Infrastructure Development (DID) a contribution is made towards skills development within the province,” says Van Barselaar.

Job seekers in the Agriculture, Hunting, Forestry & Fishing sector can expect to benefit from the strongest hiring activity since 3Q 2010 with employers reporting a Net Employment Outlook of 12% for this quarter. Based on unadjusted survey data, employers report cautiously optimistic hiring plans for 4Q 2013. The Outlook improves sharply when compared with the previous quarter and is considerably stronger year-over-year.

Outlooks are nine percentage points stronger in the Finance, Insurance, Real Estate & Business Services sector with hiring intentions the strongest since 2Q 2011 in this sector. A flat labour market is forecast for 4Q 2013 in the Manufacturing sector and employers report relatively stable hiring intentions when compared with the previous quarter. This sector also shows 9 percentage points improvement year-over-year.

“SMMEs have the potential of creating further employment opportunities in comparison to large companies and must be supported to create sustainable employment in SA.

“If support and funding for SMMEs can improve as well as the review of policies and budgets related to the SMME sector in manufacturing, then more sustainable jobs will be created that will impact on job creation, skills development and the improvement of economic conditions in the sector,” says Van den Barselaar.

Employers in the Construction sector expect the labour market slump to continue in 4Q 2013, and the Outlook has now been positive for just one quarter in the last 19. Outlook remains relatively stable both quarter-over-quarter and year-over-year.

Based on unadjusted survey data, employers in the Restaurants & Hotels sector report upbeat hiring intentions for Q4 2013. Hiring plans improve sharply when compared with 3Q 2013 and are also considerably stronger year-over-year.   Hiring plans improve by two percentage points quarter-over-quarter and are 5 percentage points stronger year-over-year.

“Employment is likely to be driven mainly by the public sector as it rolls out its infrastructure programme. However, it averred that, although recent indicators showed that demand-driven inflation remained contained, risks to the inflation outlook were still on the upside,” Van den Barselaar adds.