South African employers report cautiously optimistic hiring intentions for the next three months, with the employment outlook standing at +9% overall.
Of the 755 employers surveyed in the Manpower Employment Outlook Survey (MEOS) for the fourth quarter of 2016, 15% expect to increase staffing levels, 6% forecast a decrease and 78% anticipating no change.
Hiring plans are 2 percentage points stronger when compared with the previous quarter and improve by 3 percentage points year-over-year.
Lyndy van den Barselaar, MD of Manpower SA, comments on why South African employers are reporting cautiously optimistic hiring intentions for the October to December time frame: “As we move into the last quarter, certain industries experience an expected spike in business associated with the holiday and festive season, possibly allowing for increased employment.
“This is, of course, dependent on many factors, including the state of the economy and the strength of the rand.”
Regional comparisons
Payrolls are forecast to grow in all five regions during the October-December period.
The strongest hiring prospects are reported in Western Cape, where the Net Employment Outlook stands at +18%. Employers report encouraging signs for job seekers in Kwazulu Natal and Gauteng, with Outlooks of +10% and +8%, respectively, while the Outlook for Free State is +5%. The most cautious Outlook of +3% is reported by employers in Eastern Cape.
“The Western Capes economy is dominated by the City of Cape Town, which is a hub for non-agricultural economic activity,” Van den Barselaar says. “The city remains attractive to foreign business investors and multinational companies looking to enter Africa, as well as locally based companies looking to expand, which often creates employment opportunities within the region.
“The region is also an extremely popular tourist destination for local and international holiday makers, especially during the festive season. Employers may be anticipating that this influx of travelers will bode well for businesses in their region.”
When compared with the previous quarter, hiring intentions improve in four of the five regions, most notably by 9 percentage points in Western Cape. Elsewhere, Outlooks are 4 and 2 percentage points stronger in Kwazulu Natal and Free State, respectively. However, employers in Eastern Cape report a decline of 4 percentage points.
Year-over-year, Western Cape employers report a considerable improvement of 9 percentage points. Hiring prospects are 5 percentage points stronger in Kwazulu Natal, while the Outlook for Free State increases by 2 percentage points. Gauteng employers report relatively stable hiring plans, but Eastern Cape employers report a decline of 4 percentage points.
Sector comparisons
Staffing levels are forecast to increase in all 10 industry sectors during the coming quarter.
Wholesale & Retail Trade sector employers report the strongest hiring prospects with a Net Employment Outlook of +20%.
Elsewhere, steady hiring activity is anticipated in the Transport, Storage & Communication sector, with an Outlook of +16%, and in both the Electricity, Gas & Water Supply sector and the Finance, Insurance, Real Estate & Business Services sector, where Outlooks stand at +14%.
Public & Social sector employers report cautiously optimistic hiring intentions with an Outlook of +10%, while some payroll gains are expected in the Agriculture, Hunting, Forestry & Fishing sector, where the Outlook is +5%.
Meanwhile, the most cautious hiring intentions are reported for the Mining & Quarrying sector, with an Outlook of +1%.
“The expected hiring gains in the Wholesale & Retail Trade sector are usually expected towards the end of the year, as retail trade increases during the festive season. This may tie into the expected gains in the Transport, Storage & Communication sector, as the inflow of imported products increases, to ensure stock levels are adequate for the increase in retail trade,” says van den Barselaar.
When compared with the previous quarter, Outlooks improve in seven of the 10 industry sectors.
The most noteworthy increases of 9 and 8 percentage points are reported in the Mining & Quarrying sector and the Transport, Storage & Communication sector, respectively, while Outlooks are 7 percentage points stronger in both the Construction sector and the Wholesale & Retail Trade sector.
However, weaker hiring prospects are reported in two sectors, including the Public & Social sector where the Outlook declines by 3 percentage points.
Year-over-year, employers in six of the 10 industry sectors anticipate stronger hiring activity.
The Outlook for the Finance, Insurance, Real Estate & Business Services sector improves by a considerable margin of 12 percentage points, while increases of 10 and 7 percentage points are reported in the Transport, Storage & Communication sector and the Wholesale & Retail Trade sector, respectively. Meanwhile, Outlooks decline in four sectors.
Agriculture, Hunting, Forestry & Fishing sector employers report the most noteworthy decrease of 6 percentage points while the Outlook for the Construction sector is 5 percentage points weaker.
Organisation-size comparisons
Participating employers are categorized into one of four organisation sizes: micro businesses have less than 10 employees; small businesses have 10-49 employees; medium businesses have 50-249 employees; and large businesses have 250 or more employees.
Job gains are anticipated in all four organisation size categories during the coming quarter. Large employers report healthy hiring prospects with a Net Employment Outlook of +24%. Elsewhere, Outlooks of +7% are reported by medium- and small-size employers, while the Outlook for micro employers is +4%.
Quarter-over-quarter, hiring prospects improve by 10 percentage points for large employers, while the Outlook for small firms is 2 percentage points stronger. Elsewhere, hiring intentions remain relatively stable.
Year-over-year, large employers report an improvement of 5 percentage points, and Outlooks are 4 and 2 percentage points stronger for small- and micro-size employers, respectively. Meanwhile, medium employers report no year-over-year change.
Global trends
Across the globe, fourth quarter hiring confidence is strongest in India, Japan, Taiwan and the US, while employers in Brazil, Belgium, Finland, Italy and Switzerland report the weakest hiring plans.
Staffing levels are expected to grow by varying degrees in 42 of 43 countries and territories through the end of the year. Only employers in Brazil expect payrolls to decline in the October-December time frame. Uncertainty associated with the slowdown of the global economy, the Brexit referendum and continued financial market volatility appears to have had little impact on employer hiring confidence.
Slightly more than half of the forecasts strengthen by varying margins when compared to results reported three months ago, with hiring plans improving in 23 of 43 countries and territories, remaining unchanged in nine, and declining in 11.