Formal employment plunged in the first quarter, reflecting SA’s inability to create sufficient employment opportunities to absorb new entrants into the labour market and the government’s inability to drive employment-stimulating policies.
Stats SA’s Quarterly Employment Statistics survey published on Tuesday shows the economy shed 21,000 jobs on a quarterly basis in the first quarter of 2023, bringing the level of employment to almost 10-million. Compared with March last year, 97,000 jobs were lost in the 12-month period. The decrease was observed across various sectors, though some experienced job gains.
The firm-based survey shows the trade industry bore the brunt of the job losses, with a decrease of 36,000. The business services sector followed closely behind, with a decline of 32,000 jobs. The transport and construction industries both experienced a reduction of 2,000 jobs in this quarter.
FNB senior economist Koketso Mano said that over the longer term continued investment in alleviating productivity constraints should usher in more robust economic growth and support more broad-based and inclusive employment growth.
SA’s postpandemic economic recovery has been slow and uneven, with real GDP still at prepandemic levels. This is bad news for the SA Revenue Service, which now has a smaller pool of income tax payers.
Full-time jobs also fell on a year-on-year basis, recording a decline of 24,000 jobs, highlighting businesses’ reluctance or inability to hire employees full-time given economic circumstances.
Part-time employment enjoyed a noteworthy surge of 42,000 jobs quarter on quarter, rising from 1,110,000 in December 2022 to 1,152,000 in March.
The data shows the community services industry emerged as the leading contributor to the part-time employment increase, adding 46,000 jobs. The business services industry also demonstrated growth in the quarter, with an increase of 25,000 jobs. The transport industry experienced a rise of 1,000 jobs.
While part-time employment showed overall growth, certain industries experienced job losses during the first quarter.
The data shows the trade industry suffered a significant decline, losing 22,000 jobs. The construction industry also faced challenges, with a reduction of 7,000 jobs. The manufacturing industry experienced a loss of 1,000 jobs.
Africa economist at Oxford Economics Jee-A van der Linde said the recent growth spurt in part-time employment reflects the uncertain economic climate in which businesses seem unable or reluctant to hire employees full time.
“Economic stagnation and policy paralysis are impeding the creation of sufficient employment opportunities to absorb new entrants into the labour market and therefore contribute to continued high levels of unemployment and income inequality,” Van der Linde said.
He added dull economic prospects, the persistence of large skills shortages and a lack of employment-stimulating policies suggest the outlook for employment in SA is very bleak over the medium term.
“Moreover, high living costs and tighter monetary policy will continue to squeeze households in the near term,” he said.
Stats SA data shows that overall, average monthly earnings, including overtime and bonuses, are down 2.7% quarter on quarter but up 6.8% on an annual basis.
Stats SA said while total gross earnings declined 4% quarter on quarter, it is 5.5% higher than a year ago and has firmly surpassed 2019 first quarter levels by 18.6%.
This article has been updated with new information and comment from economists.
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