According to the Quarterly Employment Statistics (QES) survey, formal non-farm employment decreased by 31 000 jobs in Q3.17 to 9.59mn from 9.62mn in Q2.17.
The largest quarterly job losses were registered in government (-10 000), mining (-9 000) and trade (-7 000) (see figure 2).
On an annual basis, employment levels were down by 83 000 in Q3.17 compared to Q3.16, with the largest job losses of 106 000 in government (see figure 3).
Stats SA ascribes the job losses in government to “decreases in employment in provincial departments, national departments and local government.” This likely reflects efforts to reduce civil service headcounts in non-critical posts in order to contain the growth in civil service compensation. Employee compensation is the largest current expenditure item, comprising 35% of total expenditure.
The annual comparison also shows that the only meaningful employment gains, of 38 000, were in the trade industry.
The total level of employment has been on the decline so far this year (see figure 1) which is consistent with persistently weak economic activity. In the first three quarters of this year the economy has registered growth of just 1.0% compared to the same period last year. Concurrently, business confidence levels have remained at decade lows amid heightened perceived policy and political uncertainty (see figure 5).
Depressed business confidence reflects expectations of suppressed future economic growth which therefore indicates that the private business sector will not add jobs or boost investment at the present time. Indeed, recent survey evidence drawn from the retail and manufacturing sector surveys for Q1.18, signals further expected declines in the number of individuals employed (see figures 6 and 7).
In the absence of a substantial improvement in business confidence unemployment rates are likely to remain elevated at around the 28% mark.
The Quarterly Employment Survey also provides detail on wage developments across the sectors.
The growth in the compensation of employees remained steady at 6.0% y/y in Q3.17
Stats SA also reported that average real monthly earnings for non-farm employees rose 3.8% y/y to R18 982 in the three months to August 2017.
Real monthly earnings in the government sector grew at the fastest pace of 8.5% y/y to R23 210.
The highest average monthly earnings of R37 587 was paid in the electricity sector, followed by government (R23 210) and transport (R23 042).
The opinions and views expressed are for information purposes only and are subject to change without notice. They should not be viewed as independent research, recommendations or investment advice of any nature.