Opportunities for job seekers are expected to be strongest in the Wholesale & Retail Trade sector and weakest within the Manufacturing sector.
Provincially, employers in the Eastern Cape report the strongest hiring intentions for the first quarter of the year, while employers in the Free State report the weakest hiring intentions.
Johannesburg, 11 December 2018 –
South African employers report conservative hiring intentions for the next three months. With 11% of employers expecting to increase payrolls, 6% anticipate a decrease and 81% forecast no change.
Once the data is adjusted to allow for seasonal variation, the resulting Net Employment Outlook is +4%.
Despite the first quarter forecast declining slightly in both quarter-over-quarter and year-over-year comparisons, South African employers are anticipating some job gains in the months ahead. Hiring prospects decline by 2 percentage points when compared with the previous quarter and are also 2 percentage points weaker in comparison with this time one year ago.
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 country’s economic growth continues to be slower-than-expected in the short- to medium-term. This means businesses have to be cautious when it comes to spending and hiring activity, which could explain the 81% of employers reporting no change to their hiring strategies in the coming quarter,” she explains.
Regional comparisons
Employers in four of the five regions expect to increase payrolls during the upcoming quarter. The strongest labour market is anticipated in Eastern Cape, where the Net Employment Outlook stands at +8%. Moderate hiring activity is also forecast for Gauteng and Western Cape, with Outlooks of +7% and +6%, respectively, while the Outlook for Kwazulu Natal is +1%. However, Free State employers expect to trim payrolls, reporting an Outlook of -2%.
“The Department of Economic Development, Environmental Affairs and Tourism indicated in a report in October that there had been steady growth in the Eastern Cape, in sectors such as agro-processing, energy, general manufacturing and pharmaceutical products. The report also found that the automotive sector remains the Eastern Cape’s leading exporter. This positive growth could mean that businesses will need to take on additional employees in the coming quarter,” explains van den Barselaar.
When compared with the previous quarter, Kwazulu Natal employers report a considerable decrease of 12 percentage points, and Outlooks decline by 2 percentage points in two regions – Free State and Gauteng. Meanwhile, Eastern Cape employers report a considerable improvement of 14 percentage points.
In a year-over-year comparison, Kwazulu Natal employers report a decrease of 6 percentage points, and Outlooks are 4 and 3 percentage points weaker in the Western Cape and the Free State, respectively. However, Eastern Cape employers report a slight improvement of 4 percentage points.
Sector comparisons
Workforce gains are anticipated in seven of the 10 industry sectors during the next three months. The strongest labour markets are forecast for the Wholesale & Retail Trade sector and the Transport, Storage & Communications sector, with Net Employment Outlooks of +14% and +12%, respectively.
Elsewhere, moderate hiring prospects are reflected in Outlooks of +9% for two sectors – the Agriculture, Hunting, Forestry & Fishing sector and the Mining & Quarrying sector – while Restaurants & Hotels sector employers report an Outlook of +5%.
Meanwhile, payrolls are forecast to decline in two sectors, including the Manufacturing sector where the Outlook stands at -6%.
“The Wholesale & Retail Trade sector often continues to experience uptake in Q1 as the holiday season comes to an end, as consumers make their last holiday purchases and take advantage of post-Christmas sales; which could explain the positive hiring intentions of employers operating in this sector,” says van den Barselaar.
Hiring prospects weaken in seven of the 10 industry sectors when compared with the previous quarter. Agriculture, Hunting, Forestry & Fishing sector employers report a decline of 8 percentage points, while the Manufacturing sector Outlook is 7 percentage points weaker. Employers in two sectors ꟷ the Electricity, Gas & Water sector and the Public & Social sector ꟷ report decreases of 3 percentage points. Elsewhere, Outlooks strengthen in three sectors, most notably by 6 percentage points in the Construction sector.
In a comparison with 1Q 2018, hiring plans also weaken in seven of the 10 industry sectors. Noteworthy declines of 8 percentage points are reported for both the Public & Social sector and the Restaurants & Hotels sector, while Outlooks are 6 and 4 percentage points weaker in the Finance, Insurance, Real Estate & Business Services sector and the Agriculture, Hunting, Forestry & Fishing sector, respectively.
However, Wholesale & Retail Trade sector employers report a considerable improvement of 11 percentage points, and the Mining & Quarrying sector Outlook is 6 percentage points stronger.
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.
Payrolls are forecast to increase in three of the four organisation size categories during the coming quarter. Large employers report favourable hiring prospects, with a Net Employment Outlook of +16%, while Outlooks of +7% and +3% are reported by Medium- and Small-size employers, respectively. However, Micro employers anticipate an uncertain hiring climate, reporting an Outlook of -1%.
When compared with the previous quarter, hiring plans decline by 3 percentage points in both the Large- and Micro-size categories. Meanwhile, Outlooks are unchanged for Small- and Medium-size employers.
In a year-over-year comparison, Large employers report a moderate decrease of 6 percentage points, while Outlooks remain relatively stable for Micro-, Small- and Medium-size firms.
Globally, First-quarter hiring confidence is strongest in Japan, Taiwan, the U.S., Slovenia, Greece and Hong Kong, while employers report the weakest hiring intentions in Argentina, Switzerland, Italy, Panama and Spain. Hiring intentions for the coming quarter are stronger in 16 of 44 countries and territories when compared with the prior quarter, weaken in 23 and are unchanged in five. In a comparison with this time one year ago, Outlooks improve in 21 countries and territories, decline in 20, and are unchanged in two.