South African employers are reporting subdued hiring plans for the second quarter of 2014 in the Manpower Employment Outlook Survey.
Nationally, employers expect only limited opportunities for job seekers this quarter as South Africa’s seasonally adjusted Net Employment Outlook stands at 0%. The outlook is down 4 percentage points quarter-on-quarter and two percentage points year-on-year.
Lyndy van Barselaar, MD of Manpower SA, provides insights into why the South African employment market is expected to remain reserved.
“While the country’s businesses environment is still in the process of recovering from the recession, economic growth has been slow paced. This has an enormous impact on employment. These factors, paired with the ever-rising fuel price, the added pressure of E-Tolls and the high cost of living, mean employers are cautious about expanding their businesses.
“This is evident in the results, as the Net Employment Outlook stands at 0%, forecasting a relatively flat labour market for the upcoming quarter.”
Employers in two of the five regions foresee payroll gains in the second quarter. A hopeful Net Employment Outlook of +11% is reported for the Free State, while employers in the Gauteng report some expected gains, with an outlook of +5%. Muted hiring opportunities are expected in the Eastern Cape and KwaZulu-Natal, where the outlooks stand at -5% and -4% respectively.
The Western Cape expects stagnant hiring prospects, with an outlook of -1%.
Quarter-over-quarter, hiring plans weaken in three of the five regions. However, employers report improvements of 12 percentage points in the Free State, while the employment outlook for Gauteng has remained stable.
“The Free State has, since 1989, changed from being solely dependent on mining and agriculture to being a manufacturing, export-oriented economy. This has assisted the province in continuously creating jobs for its people, as the business climate expands,” says van den Barselaar.
Hiring prospects improve in two of the five regions when compared with Q2 2013. The most noteworthy improvements of 11 percentage points is reported in the Free State. Employers in Gauteng report an Outlook increase of 3 percentage points. However, hiring intentions weaken by 5 percentage points in the Western Cape and Kwa-Zulu Natal. Employment in the Eastern Cape has weakened 10 points compared with Q2 2013.
Employers in six of the 10 industry sectors anticipate growing payrolls during the second quarter of the year.
The most positive hiring intentions are reported in the Electricity, Gas & Water Supply sector, the Finance, Insurance, Real Estate & Business Services sector and the Mining & Quarrying sector, where Outlooks stand at +8%, +5% and +5%, respectively. The weakest hiring intentions were reported in the Construction sector, with a Net Employment Outlook of -9%.
“The expected employment gains in the Electricity, Gas & Water Supply sector are possibly owing to Government’s increased efforts to supply those in rural areas with basic housing, electricity and access to clean water. The electricity and water industries are also engaged in efforts toward the sustainable use of energy and resources.
“This creates a demand for specialised skills, as these are needed in the development and use of the technologies around sustainability,” explains Van den Barselaar.
“With the cost of living constantly increasing, consumers and businesses are becoming far more aware of how they spend their money. This increases the demand for financial and business services, such as financial advice and planning. Meanwhile, mining and quarrying are essential services in a country like South Africa, contributing significantly to the GDP.
“According to the Chamber of mines, mining contributed 8.3% to the GDP in 2012. While the sector does fall victim to social unrest and other labour challenges, it is a sector that manages to recover.”
Quarter-over-quarter, hiring prospects weaken in 9 of the 10 industry sectors. The largest quarter-on-quarter decrease was reported in the Agriculture, Hunting, Forestry & Fishing sector where the forecast declines 9 percentage points, followed by a 7 percentage point drop in the construction sector.
The Mining & Quarrying sector reports slight gains, with a Net Employment Outlook of +5%, despite a 4-percentage point decrease quarter-on-quarter and a 1 percentage point drop year-on-year.
When compared with the same quarter in 2013, employers in half of the 10 sectors report improvements, while the other half report decreases. The strongest improvement is seen in the Restaurants & Hotels sector where the Outlook strengthens 5 percentage points. Meanwhile, the forecast in the Electricity, Gas & Water supply and Manufacturing sectors improves by 3 percentage points.
The forecast in the Agriculture, Forestry and Fishing sector declined 8 percentage points, year-on-year while the Construction sector Outlook dropped 6 percentage points.
“South Africa’s Net Employment Outlook of 0% reflects a relatively flat job market for the second quarter of the year. We see some evidence that many employers remain positive. But it is imperative that provincial government continues to support employment through skills training, as well as support for small-, medium- and macro-enterprises.
“Policies such as the Skills Development Levy and the Skills Development Act support job creation and economic growth, which should reflect positively on the job market in future,” says Van den Barselaar.