The Covid-19 pandemic has structurally altered the labour market so much that a return to pre-Covid-19 levels may be insufficient to compensate for the setbacks in this period.
The impact on the labour market is further worsened by the slowing momentum in global growth due to the prevailing geopolitical tension that poses a risk to the recovery of domestic output and employment.
SA is still battling one of the world’s most dismal overall unemployment rates. At 34.5% in the first quarter of 2022, it was moderately down from the record 35.3% jobless rate recorded in the final three months of 2021.
Stats SA data released on Tuesday show that even though total employment increased quarterly and annually, concern persists over the sharp decline in full-time jobs, while part-time jobs are increasing.
Employment increased by 42,000 jobs, or 0.4%, from 10,062,000 in December 2021 to 10,104,000 in March 2022.
The data show that full-time employment continues to lag behind part-time employment, increasing by only 1,000 jobs between December 2021 and March 2022.
International trends
Part-time employment increased by 192,000 year on year between March 2021 and March 2022.
This is in line with international trends reported by the SA Reserve Bank in its quarterly bulletin on Tuesday.
The country’s quarterly employment statistics provide insight into employment dynamics in the formal non-agricultural sectors of the economy for the first quarter of 2022.
Stats SA said the increase in employment is largely due to rises in the community services, manufacturing and mining sectors.
SA’s employment rate remains 2.8% below prepandemic fourth-quarter 2019 levels.
Even though SA’s economy carried over its positive momentum from the previous quarter, growing faster than expected at 1.9% in the first quarter, after an upwardly revised 1.4% rise in the previous period, this momentum is expected to cool in the second quarter, resulting in fewer jobs being created.
Economists say this is likely to take the unemployment rate to new highs in 2022.
Electricity supply
SA’s growth trajectory continues to be stifled by electricity supply constraints, logistical challenges and heightened red tape. A lift in the factors driving business confidence is required to encourage investment, growth and accordingly job creation.
Investec economist Lara Hodes said the hiring of part-time workers probably reflects the current economic climate and financial uncertainty, with many employers unable or hesitant to hire full-time employees.
FNB economist Koketso Mano said the prevailing geopolitical tensions and the related rise in global inflation are expected to slow the momentum in global growth, posing a risk to domestic output and employment.
“In addition, the KwaZulu-Natal floods and electricity shortages are likely to worsen the impact on local growth and impede employment prospects,” Mano said.
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