South African employers are cautiously optimistic, reporting conservative hiring intentions for the coming quarter.
Of the 751 employers who participated in the ManpowerGroup Employment Outlook Survey Q2 2017, 12% expect to increase staffing levels, 5% forecast a decrease and 81% anticipate no change.
Once the data has been seasonally adjusted, the resulting Net Employment Outlook is +7%. Hiring prospects are unchanged quarter-over-quarter and improve by 2 percentage points year-over-year.
Lyndy van den Barselaar, MD of Manpower SA, provides insights into why South African employers are reporting cautiously optimistic hiring intentions for the April to June time frame: “As global economic uncertainty continues, many businesses will be more cautious about increasing staffing levels.
“The majority of local employers said they anticipated no change in their staffing levels for the upcoming quarter, which is a reflection of this economic uncertainty translating into the local employment market,” she says.
Regional comparisons
Workforce gains are anticipated in all five regions during 2Q 2017. The strongest labour market is forecast in Western Cape, where employers report a Net Employment Outlook of +14%. Elsewhere, employers report cautiously optimistic Outlooks of +9% in both Free State and KwaZulu Natal, while Outlooks stand at +6% and +4% in Eastern Cape and Gauteng, respectively.
“The Western Capes economy is dominated by the City of Cape Town, which is an extremely popular tourist destination for local and international holiday-makers,” says Van den Barselaar. “There is a strong push for development in the tourism sector, as was seen by government’s R100-million investment into building the Plettenberg Bay Airport road, the proposed completion of the N1 road coming into Cape Town, the R832-million expansion currently underway at the Cape Town International Convention Centre, the building of the new Zeiss Museum of Contemporary Arts Africa at the V&A Waterfront, as well as the expansion and refurbishments of various new hotels in the city.
“The tourism sector is the largest employer in the region, employing more than 4000 people with the prospects of more jobs created as the sector continues to grow. This could definitely be a contributing factor to the positive employment outlook in the region,” she adds.
“While Gauteng remains the economic hub of South Africa, employers in the province have registered a conservative outlook of +4% for the second consecutive quarter. Initiatives around economic transformation by the Gauteng provincial government are aimed at stimulating key aspects of the market, which will create opportunities for further employment in the province in the coming quarters.
“These initiatives are focused on encouraging local manufacturing of goods, support for black-owned firms, and unlocking employment opportunities for all people across the province; as reported in the State of the Province address last month.”
Quarter-over-quarter, hiring intentions are 4 percentage points stronger in KwaZulu Natal and improve by 2 percentage points in Free State. Elsewhere, hiring prospects remain relatively stable in Eastern Cape and Western Cape, while Gauteng employers report no change.
Hiring plans improve by 9 percentage points in Free State and Western Cape when compared with the second quarter of 2016, while a slight increase of 2 percentage points is reported in KwaZulu Natal. However, Gauteng employers report a year-over-year decline of 2 percentage points.
Sector comparisons
Employers in all 10 industry sectors forecast an increase in payrolls during the upcoming quarter.
Transport, Storage & Communication sector employers report the strongest hiring intentions with a Net Employment Outlook of +15%, while Outlooks stand at +11% in both the Agriculture, Hunting, Forestry & Fishing sector and the Finance, Insurance, Real Estate & Business Services sector.
Employers in the Wholesale & Retail Trade sector report cautiously optimistic hiring plans with an Outlook of +10%, while Outlooks of +9% are reported in both the Electricity, Gas & Water Supply sector and the Restaurants & Hotels sector. Meanwhile, the most cautious Outlook of +1% is reported by Mining & Quarrying sector employers.
“The current push for investment into improving existing and also building new infrastructure, especially that of roads, is a contributing factor to the expected growth in hiring in the Transport, Storage & Communication sector. Another possible contributing factor is the increase in service providers providing last mile fibre to the home (FTTH) and fibre to the business (FTTB), to support the growth of South Africa’s digital transformation and economy at large,” explains Van den Barselaar.
Hiring prospects improve in six of the 10 industry sectors when compared with the previous quarter. The most noteworthy increase of 10 percentage points is reported by Transport, Storage & Communication sector employers, while Outlooks are 6 and 5 percentage points stronger for the Construction sector and the Wholesale & Retail Trade sector, respectively.
However, hiring plans weaken in four sectors, including the Restaurants & Hotels sector with a decrease of 5 percentage points and the Electricity, Gas & Water Supply sector, where employers report a decline of 4 percentage points.
Year-over-year, Outlooks strengthen in five of the 10 industry sectors, most notably by 13 percentage points in the Agriculture, Hunting, Forestry & Fishing sector. Elsewhere, increases of 12 and 9 percentage points are reported in the Transport, Storage & Communication sector and the Wholesale & Retail Trade sector, respectively. Meanwhile, hiring prospects weaken in three sectors, including the Construction sector and the Mining & Quarrying sector, where employers report decreases of 4 percentage points.
Organisation-size comparisons
Participating employers are categorised 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.
Staffing levels are expected to grow in all four organization size categories during 2Q 2017. Large employers report upbeat hiring prospects with a Net Employment Outlook of +18%, while Outlooks stand at +8% and +6% for Medium- and Micro-size employers, respectively. The most cautious Outlook of +3% is reported by Small employers.
Quarter-over-quarter, Micro employers report an improvement of 5 percentage points, but the Outlook for Small firms is 3 percentage points weaker. Elsewhere, Large employers report no change and the Outlook for Medium employers remains relatively stable.
When compared with this time a year ago, Outlooks improve by 6 percentage points for Micro employers and by 5 percentage points for Large employers, while Medium employers report an increase of 2 percentage points. Meanwhile, Small employers report relatively stable hiring plans.
Globally, second-quarter hiring confidence is strongest in Taiwan, Japan, Slovenia and India. The weakest forecasts are reported in Brazil, Italy, Belgium and Switzerland. Hiring plans improve in 17 of 43 countries and territories when compared quarter-over-quarter, decline in 15, and are unchanged in 11.
The year-over-year trend reveals a more pronounced uptick with Outlooks strengthening in 25 countries and territories, weakening in 14, and remaining unchanged in three.