Recent data from Stats SA showed SA’s formal nonagricultural sector shed 133,000 jobs in the third quarter, pulling the level of employment down to 10.62-million jobs from 10.74-million in June.
Most of the third quarter’s job losses came from the community services industry, which shed 131,000 employees in the period — 128,000 of which were part-time roles, as temporary jobs created to run the May election, which boosted the second quarter reading, fell away in the third quarter.
However, six of the eight industries included in the survey experienced a decline in employment and, while the quarterly job loss was moderate when accounting for temporary election jobs, employment fell by 294,000 year on year, 250,000 of which were full-time jobs.
Despite the decline in employment, average monthly earnings across the formal non-farm sector grew by 6.6% in the third quarter compared to the same period last year, with basic salaries and wages paid to employees increasing by 3.4% year on year.
Investec chief economist Lara Hodes said the quarter’s reading was reflective of a local economy that remains subdued as it continues to face a number of challenges, particularly on the logistics front.
Most of the quarter’s full-time job losses came from the business services industry, which recorded a reduction of 22,000 full-time jobs, and experienced the second largest employment drop after community services.
Significant declines were also recorded for the manufacturing and transport sectors, which lost 4,000 and 3,000 jobs, respectively, between June and September, while mining lost 2,000 employees and electricity lost 1,000.
Minerals Council SA chief economist Hugo Pienaar said the decline in mining jobs follows the start of retrenchments during the first half of this year, primarily in the platinum group metals (PGM) sector.
This is the third consecutive quarter to record job losses in the mining sector, which lost almost 10,000 jobs in the first nine months of this year, 93% of which were in the non-gold mining industry.
The only sectors recording employment increases in the quarter were trade and construction, which added 19,000 and 4,000 jobs, respectively, despite both industries paying their employees less than in the second quarter overall.
Gross earnings paid by the trade industry fell by R1.2bn, and in construction they fell by R334m. Declines of R908m and R884m were also seen in gross earnings paid by the manufacturing and transport sectors, respectively.
Overall, gross earnings paid to employees across all industries rose by 1.3% from the second quarter to a total of R966.3bn in September. However, the growth in earnings was not broad based, with only half of the sectors that were surveyed recording increases — namely, business services, community services, mining and electricity.
Discounting the decline in mining and the temporary election workers, total formal sector employment increased by a modest 3,122 jobs, much of which came from the trade sector, which was supported by a notable increase in retail confidence, according to Hodes.
“Even when excluding the job losses in the mining sector and the distortion arising from the temporary IEC workers, there was only a very modest rise in formal employment during the third quarter,” said Pienaar, emphasising the importance of “removing the binding constraints that are holding back real GDP growth in SA”.
Pienaar said faster and sustained progress on structural reforms, including improving Transnet’s rail and port performance, are essential to shield against “an uncertain international environment” and potential headwinds next year, particularly for SA mining.
The latest data comes one month after the release of Stats SA’s quarterly labour force survey for the third quarter, which showed the country’s official unemployment rate decreasing by 1.4 percentage points from June to 32.1% in September.
Update: December 12 2024
This story has been updated with new information.
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