South African employers report conservative hiring intentions for the January-March time frame.
With 15% of employers expecting to increase staffing levels, 8% forecasting a decrease and 75% anticipating no change, the Net Employment Outlook is +6% once the data is adjusted to allow for seasonal variation.
Hiring prospects remain relatively stable when compared with the previous quarter, and are unchanged when compared with the first quarter of 2017.
Lyndy van den Barselaar, MD of ManpowerGroup SA, provides insights into why South African employers are reporting conservative hiring intentions for the January to March time frame.
“The local economy continues to struggle under economic and political uncertainty, low business and consumer confidence and a fluctuating currency. Therefore, it comes as no surprise that employers remain conservative in their spending and hiring patterns.
“That being said, the beginning of the year is often the time where businesses revisit their staffing strategies, and take on new hires — which could account for the small increase of 1% in the seasonally adjusted Net Employment Outlook,” she says.
Payrolls are forecast to grow in four of the five regions during 1Q 2018. Western Cape employers report the strongest hiring intentions with a Net Employment Outlook of +10%, while some hiring opportunities are anticipated in Kwazulu Natal, with an Outlook of +6%.
Elsewhere, employers report modest hiring plans with Outlooks of +5% in both Eastern Cape and Gauteng. However, Free State employers forecast flat hiring activity, reporting an Outlook of 0%.
When compared with the final quarter of 2017, hiring plans improve by 6 percentage points in Eastern Cape, and are 2 percentage points stronger in Western Cape. However, the Free State Outlook declines by 4 percentage points. Elsewhere, hiring plans remain relatively stable in both Gauteng and Kwazulu Natal.
Employers report weaker hiring prospects in two regions when compared with this time one year ago. Free State employers report a moderate decline of 7 percentage points, while the Outlook for Western Cape is 2 percentage points weaker. In Eastern Cape, Gauteng and Kwazulu Natal, employers report relatively stable hiring intentions.
“The Western Cape continues to attract visitors and tourists in the first few months of the year, as the South African summer reaches its peak. This could continue to have a positive effect on hiring intentions among the province’s employers,” explains van den Barselaar.
“Employers in the province continue to focus on job creation. For example, it was recently reported that the Cape Town International Convention Centre (CTICC) generated R216-million in revenue during the financial year ended June 30 2017 – up from R209-million the previous year, and that due to the centre’s operations, 7 824 jobs were sustained in Cape Town and South Africa. The CTICC has already secured 58 major international events up until 2022, which could also be assisting with job creation in the coming months,” explains van den Barselaar.
Employers in eight of the 10 industry sectors expect to increase staffing levels during 1Q 2018. T
he strongest hiring pace is forecast in two sectors with Net Employment Outlooks standing at +12% − the Agriculture, Hunting, Forestry & Fishing sector and the Restaurants & Hotels sector.
Finance, Insurance, Real Estate & Business Services sector employers report cautiously optimistic hiring plans, with an Outlook of +9%, while Outlooks stand at +8% and +7% in the Public & Social sector and the Transport, Storage & Communication sector, respectively.
However, employers in two sectors expect payrolls to decline. Manufacturing sector employers report a sluggish Outlook of -9%, while the Construction sector Outlook is -2%.
“The need for further education and training, investment and development in the South African agriculture, forestry and fishing sectors has been gaining traction in recent months,” explains van den Barselaar. “The Department of Agriculture, Forestry and Fisheries just reported that 316 small-scale fishing communities have recently been registered along the South African coast. The plan is that in between December 2017 and March 2018 co-operatives will be established, registered and allocated rights in the Western Cape and Eastern Cape; and KwaZulu-Natal will follow in March 2018.”
Hiring plans improve in six of the 10 industry sectors when compared with the previous quarter. Agriculture, Hunting, Forestry & Fishing sector employers report the most notable increase of 13 percentage points, while Outlooks are 5 percentage points stronger in both the Mining & Quarrying sector and the Public & Social sector.
Meanwhile, hiring prospects weaken in four sectors, including the Manufacturing sector, with a considerable decline of 16 percentage points. The Construction sector Outlook is 6 percentage points weaker, while Electricity, Gas & Water Supply sector employers report a decline of 5 percentage points.
When compared with 1Q 2017, Outlooks decline in five of the 10 industry sectors. Considerable decreases of 20 and 13 percentage points are reported in the Manufacturing sector and the Electricity, Gas & Water Supply sector, respectively.
However, employers in four sectors report stronger hiring intentions, most notably in the Public & Social sector, with an increase of 6 percentage points, and in the Agriculture, Hunting, Forestry & Fishing sector, where the Outlook is 5 percentage points stronger.
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.
Payrolls are forecast to increase in three of the four organisation size categories during the coming quarter. Large employers report a healthy Net Employment Outlook of +23%, while Outlooks stand at +6% and +2% for Medium- and Small-size employers, respectively. However, Micro employers anticipate a decline in staffing levels, reporting an Outlook of -2%.
When compared with 4Q 2017, hiring intentions remain relatively stable for Micro-, Small- and Large-size employers, while Medium employers report no change.
In a comparison with this time one year ago, hiring prospects decline by 3 percentage points for Micro- and Small-size employers, but improve by 5 percentage points for Large employers. Meanwhile, Medium employers report relatively stable hiring plans.
Globally, workforce gains of varying margins are forecast by employers in 41 of 43 countries and territories during the January-March time frame. And for the second consecutive quarter since the global financial crisis in 2009, employers report no negative Outlooks among the 43 countries and territories. Additionally, employers in a number of countries, including Australia, Japan, Norway, Poland, Romania and the US, report their strongest hiring plans in five years or more. There are also signs that the volatility recently observed in some countries – most notably in Brazil, China and India – is declining.
Globally, the strongest Net Employment Outlooks are reported by employers in Taiwan, Japan, India, the US and Costa Rica. Meanwhile, employers report the weakest hiring prospects in Austria, Italy, Belgium and France. For the second consecutive quarter since the global recession in 2009 there are no negative Outlooks reported across the 43 countries and territories surveyed.