The most recent Manpower Employment Outlook Survey predicts a relatively stable labour market for the third quarter of 2013.
South Africa’s seasonally adjusted Net Employment Outlook of 0% indicates the percentage of employers who intend adding to their payrolls will be on par with the percentage of those who intend to reduce their workforces in the months ahead.
The Outlook is also relatively stable in comparison to the second-quarter forecast, dropping by 1 percentage point, but drops by a margin of 5 percentage points when compared to the same period last year.
The forecast bodes well for those in the Mining and Quarrying and Finance, Insurance, Real Estate and Business Services Sectors, but the Agricultural, Hunting, Forestry and Fishing and Restaurants and Hotels sectors will experience a pessimistic outlook.
Raw data from the survey showed that 8% of employers planned on increasing staff levels while 9% planned on decreasing their staff levels. 81% foresaw no change in their staff levels during the third quarter. Once seasonal variations are removed from the data, the Outlook stands at 0%.
“Global low confidence combined with various local issues continue to plague the employment sector. Slow economic growth combined with ongoing cost increases in areas such as labour, electricity and fuel are continuing to impede on improving job prospects.
“Consumers continue to cut back on spending, which directly influences sectors such restaurants and hotels and manufacturing, while businesses continue to wait for a recovery in the economy by holding back on employing new staff,” says Lyndy Van Den Barselaar. MD of Manpower Group South Africa.
Employers in five of the 10 industry sectors expect to trim payrolls during 3Q 2013. The weakest hiring prospects are reported in the Agriculture, Hunting, Forestry and Fishing sector and the Restaurants and Hotels sector, with Net Employment Outlooks of -8% and -7%, respectively.
Muted hiring plans are also reported in the Manufacturing sector, with an Outlook of -4%, and in the Transport, Storage and Communication sector, where the Outlook is -3%.
However, employers in four sectors expect to increase staffing levels, most notably in the Mining and Quarrying sector and the Finance, Insurance, Real Estate and Business Services sector, where Outlooks stand at +8% and +5%, respectively.
“The Agricultural sector, which was the biggest contributor to job growth in the first quarter of the year with 54 000 jobs added, is being hampered by negative effects which expect the sector to shed many of these jobs,” says Barselaar. “The raising of the minimum wage from R 69.00 per hour to R 105.00 is impeding a sector that is already struggling with increased fuel, energy and machinery costs.
“Mining is also suffering, despite showing positive hiring forecasts, these could be better, but a falling gold price, labour unrest and uncertainty as to future labour legislation in the sector, is putting a drag on employers’ employment ambitions.
“This is also being compounded by the fact that the National Union of Mineworkers is demanding a 47% increase in the entry-level wage for surface workers and a 60% increase for underground workers this year. With inflation at under 6%, commodity prices dropping, increasing non-wage costs, and shrinking margins, this is simply not viable.”
When compared with the previous quarter, employers report weaker hiring intentions in five of the 10 industry sectors, with the most noteworthy decline of eight percentage points in the Agriculture, Hunting, Forestry and Fishing sector.
Hiring plans weaken by seven percentage points in the Wholesale and Retail Trade sector and by five percentage points in the Transport, Storage and Communication sector. Meanwhile, Outlooks improve in four sectors, most notably by five percentage points in the Mining and Quarrying sector and by four percentage points in the Finance, Insurance, Real Estate and Business Services sector.
Year-over-year, employers report weaker hiring prospects in eight of the 10 industry sectors. Considerably weaker hiring plans are evident in the Agriculture, Hunting, Forestry and Fishing sector and the Wholesale and Retail Trade sector, where Outlooks decline by 14 and 12 percentage points, respectively.
The Outlook for the Transport, Storage and Communication sector decreases by 11 percentage points, while Construction sector employers report a decline of seven percentage points. Outlooks weaken by four percentage points in both the Manufacturing sector and the Restaurants and Hotels sector. Elsewhere, Mining and Quarrying sector employers report a slight improvement of two percentage points.
Employers anticipate payroll gains in two of the five regions during 3Q 2013, with Net Employment Outlooks standing at +4% and +1% in Gauteng and Free State, respectively. However, employers report subdued hiring prospects in Western Cape, with an Outlook of -2%, and in both Eastern Cape and KwaZulu-Natal, where Outlooks stand at -1%.
Quarter-over-quarter, employer hiring intentions weaken by six percentage points in Eastern Cape and by two percentage points in Western Cape. Meanwhile, Gauteng employers report a five percentage point Outlook improvement. Elsewhere, the KwaZulu-Natal outlook remains relatively stable and hiring prospects are unchanged in Free State.
Year-over-year, employers report weaker hiring plans in four of the five regions. The Eastern Cape Outlook declines by 10 percentage points, while a decrease of seven percentage points is reported in Western Cape. Outlooks decline by three percentage points in both Free State and Gauteng. However, in KwaZulu-Natal, employers report a two percentage point improvement.
“Employers have also become much more cautious in hiring as a strategy against future economic swings,” Barselaar says. “Strict employment regulations, unions and strikes have made it much harder for many companies to adapt to the changing economic climate, and they do not want to be caught in the same situation in the future.
“What we currently need is stability while waiting for an economic recovery. Increasing wages and employment legislation whilst the business sector is struggling will only lead to further job losses. Economic growth is key to job creation, however, burdening companies with increased costs in an already beleaguered economic climate will not lead to spurring on the growth that is so desperately needed,” she adds.
Globally, job seekers in most of the 42 countries and territories surveyed can expect to benefit from varying degrees of positive third-quarter hiring activity with employers in 31 countries and territories planning to boost payrolls.
Yet the third-quarter research provides little evidence that global hiring plans are improving by any notable degree. Instead, uncertainty continues to drag down employer confidence and the research indicates that third-quarter hiring activity will slow further from last year at this time in most countries and territories.
Net Employment Outlooks improve or remain relatively stable in only 19 countries and territories in a year-over-year analysis.
Worldwide, hiring expectations are strongest in Taiwan, Brazil, Panama, Peru and Turkey. The weakest opportunities for job seekers are expected in Italy, Ireland and Spain.
The research was conducted by interviewing a representative sample of 750 employers in South Africa.
All survey participants were asked, “How do you anticipate total employment at your location to change in the three months to the end of September 2013 as compared to the current quarter?”
Unlike surveys which operate with hindsight and analyse the previous quarter of the year, the Manpower Employment Outlook Survey is unique in that it forecasts the future shape of the employment industry for the next quarter.