Results from the latest PPS Graduate Professionals Confidence Index, which tracks confidence levels of more than 3 000 of South Africa’s graduate professionals, show that confidence levels among graduate professionals in South Africa deteriorated over the second quarter of 2011.
The survey, which is conducted on a quarterly basis, tracks confidence levels on a variety of issues such as emigration, crime, healthcare and opportunities available in their chosen professions. Overall confidence levels, among this group, fell to 57% in the second quarter from 60% in the first three months of the year.
According to Gerhard Joubert, head of group marketing & stakeholder relations at PPS, this broad deterioration in confidence is concerning as graduate professionals are a key component in the South African labour force, occupying positions such as accountancy, medicine and law, many of which suffer from a skills shortage.
Joubert says there may be a number of reasons why confidence has deteriorated so during the period. “South Africa’s annual strike season began during the period that respondents were surveyed, which when combined with discussions regarding nationalization by key parties, is likely to have had an impact on the results. In addition, certain economists also downgraded second quarter GDP growth forecasts during the period, exacerbating concerns over the economy.”
The results revealed a drop in confidence levels on all seven of the surveyed factors.
On their confidence of remaining in South Africa, graduate professionals recorded an average confidence level of 81% in the second quarter, down from 84% in the first three months of the year. “This is still a very positive confidence reading, however, the downward trend is a concern given the skills shortage in many of the professions specific to graduate professionals.”
Respondents were also less confident about the opportunities available to practitioners working within their specific profession over the next 12 months, with the survey revealing a decline in confidence to 74% from 77% previously.
Professionals were confident in the protection that the Consumer Protection Act (CPA) offers their clients, with a level of 69%. However, on the value that the CPA would add to their profession, respondents were less positive, recording a confidence level of just 60%. “There is still much uncertainty regarding how the CPA will impact on various professions and we would expect further clarity on this issue over the coming months to alleviate some of these concerns.”
Professionals also recorded a deterioration in confidence on a variety of macro issues. Confidence in the standard of education improving over the next five years fell to 47% from 50%. 84% of respondents said they were concerned about the rising cost of education in South Africa.
Confidence in unemployment improving over the next five years recorded the lowest confidence level of all at just 42%, down from 46% previously. Confidence in the crime situation improving over the next five years also fell to 43% from 45% last time.
Confidence in the future of the healthcare system over the next five years also fell to 46%, down from 50% last time. This decline may be attributed to ongoing discussions around the implementation of the government’s proposed National Health Insurance (NHI) initiative. In response to a question on their confidence of NHI having a positive impact on South Africa, respondents recorded a confidence level of just 44%.
A significant decline in confidence was also recorded in professionals’ outlook for local equity markets over the next 12 months, down to 65% from 71% previously. Joubert says fears over the US struggling to agree a deal to raise its debt ceiling, combined with the ongoing sovereign debt crisis in Europe, has been hugely unsettling for investors, particularly in emerging markets, as these regions tend to suffer acutely on the back of market volatility.
Joubert concludes that while little can be done about fears over the sovereign debt crisis in the developed world, it is important that issues that can be dealt with, such as education, crime and healthcare are taken seriously and where possible, are addressed.