The construction, manufacturing and mining sectors were among industries that contributed to a decline in formal employment in the fourth quarter of 2023, Stats SA said on Tuesday.
Economists said low commodity prices, especially for platinum group metals (PGMs), and weak activity in the construction and manufacturing sector were not supportive of job growth.
Formal employment in the fourth quarter decreased by 194,000 jobs, or 1.8%, quarter on quarter.
The quarterly employment statistics (QES) survey results released by Stats SA on Tuesday show total employment in the formal sector dropped from 10.9-million in September to
10.7-million in December. It was largely driven by a 13.5% decrease in part-time employment — especially in the community services sector, which lost 203,000 jobs over the period.
Stats SA said full-time employment decreased by 5,000 jobs, driven by job losses in sectors such as construction, manufacturing and mining.
According to Lisette IJssel de Schepper, chief economist at the Bureau for Economic Research (BER), results from the latest RMB/BER business confidence index suggest that the building and construction sectors are likely to struggle again in the coming quarters.
Building activity stabilised in the first quarter of 2024. However, the index showed an uptick in the rating of the lack of new building demand.
“This does not bode well for employment growth in the sector. There is some potential upside from the reasonably solid performance by the civil construction sector, which continued into the first quarter of this year. This was most likely driven — but not exclusively — by renewable energy and road infrastructure projects,” she said.
The picture for manufacturing, said IJssel de Schepper, was even more bleak. Results from the index showed that in the first quarter of 2024, only two out of 10 business people in the manufacturing sector were satisfied with prevailing business conditions.
“The expectation is that load-shedding should be less intense over the next 12 months compared to last year, which could help with production and, in turn, investment and employment. Still, it is understandable that manufacturers would rather wait and see this happen before turning more positive.
“We need to see sustained higher confidence levels to stimulate investment and employment growth,” she said.
Hugo Pienaar, chief economist at the Minerals Council SA, said the mining industry was likely to shed more jobs during the first half of 2024.
“The 1,000-job decline was consistent with what we started seeing from announcements by big mining houses towards the end of the last year. It is important to note that despite the decline in the fourth quarter, better performance in previous quarters still resulted in mining adding about 9,000 jobs year on year in 2023,” Pienaar said.
However, the outlook for 2024 is less optimistic. While the gold industry has been performing well these past few months, platinum miners have faced dramatic decreases in PGM prices, which declined on average by about 40%. Many mining houses such as Anglo American Platinum and Sibanye-Stillwater have either already started cutting jobs or announced plans to retrench workers this year.
Pienaar said that based on the announcements that had been made by platinum miners, between 5,000 and 6,000 jobs could be lost in the short term.
Year on year (December 2022 to 2023), full-time employment increased 0.1% and part-time employment by 7.6%.
The QES reports only on formal, non-agricultural employment and earnings trends, unlike the quarterly labour force survey (QLFS), which covers formal, informal and agriculture sectors.
The QLFS for the fourth quarter of 2023 showed that the official unemployment rate in SA increased by 0.2 percentage point from 31.9% in the third quarter of 2023 to 32.1% in the fourth quarter.
The QES report showed basic wages and average monthly earnings increased. However, there was a 4.5% decrease in bonus payments year on year.
“Average monthly earnings paid to employees increased 1.6% from R26,471 in August 2023 to R26,894 in November 2023. Year on year, there was an increase of 2.3%,” Stats SA said.
This means average monthly earnings increased at a much slower pace than inflation, which averaged 6% for 2023.
Correction: March 26 2024
The first paragraph has been amended to reflect the correct year: 2023.
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