Job gains ‘not likely to last’

Increase in employment is unlikely to be sustained amid dampened business confidence

The first quarter of the year brought relief to thousands of job-seekers in South Africa, with a net 56 000 new positions filled in the first three months.
But the increase in employment is unlikely to be sustained amid dampened business confidence.
The key drivers of the job creation were the community services and construction sectors, Stats SA said yesterday.
However, after a weak performance from the manufacturing sector in the first quarter, which weighed on economic growth, this is unlikely to be sustained.
The trade and mining sectors saw huge job losses.
“Given just how poorly the manufacturing and construction sectors have performed, we are sceptical that the job gains in these two industries can be sustained,” FNB senior economic analyst Jason Muscat said.
Between March last year and March this year, overall employment increased by 74 000, or 0.8%.
Stats SA’s Quarterly Employment Statistics report is based on a sample survey of private and non-agricultural businesses such as factories, firms, offices and stores, as well as from national, provincial and local government entities.
The increase in employment, according to the government statistician, has been attributed to the community services, construction, manufacturing and business services sectors, which had helped to boost employment growth in the first quarter of the year.
Employment increased from 9.78 million jobs in December to 9.83 million in March, according to the report.
Community services showed the largest growth during the quarter under review, contributing 67 000 jobs, while construction jobs rose by 12 000, manufacturing 9 000 and business services 4 000.
However, the trade industry shed 26 000 jobs, the mining and quarrying industry 7 000 and the transport sector 3 000.Stats SA said community services comprised government jobs from national to local level and IEC (Electoral Commission of South Africa) positions.
“The growth figures should be seen in context,” Matlapane Masupye said.
“A significant portion of the jobs growth in the community services sector can be attributed to jobs created by the IEC.
“These are positions created ahead of the national elections which will be held next year.”
The Coega Development Corporation (CDC), which manages one of the Eastern Cape’s largest job generators – the Coega Special Economic Zone, said yesterday: “The CDC is delighted by the increased job numbers reported by Statistics SA.
“This translates to 56 000 more people having been able to put bread on their tables.”
CDC spokesman Ayanda Vilakazi said the news came shortly after the CDC had marked a significant milestone of 100 000 jobs having been created since its inception.
National African Federated Chamber of Commerce and Industry (Nafcoc) secretary Mandla Msizi said he found the latest figures surprising.
“The numbers may be due to construction projects in closing phases, the major fibre optic cables being laid and the completion of road works projects,” he said.
“I think the numbers give a false impression as many of these jobs are temporary.
“What we really need are the mega projects that have massive capital investments and will run for years, thereby providing sustainable and long-term employment.”
He cited the vehicle production plant being constructed in the city as an example.
The Nelson Mandela Bay Business Chamber said it was not in a position to comment yesterday.
The release of the data came on the same day that ratings agency Moody’s released a research report which found that the excitement created by President Cyril Ramaphosa’s election had not translated into investment, largely because of uncertainties created by land and mining reforms.
Moody’s senior credit officer Lucie Villa said while consumer and business confidence had improved in the first quarter, investment weakened during that period as uncertainty over land reform and the mining charter persisted.
“Uncertainty over how [land reform] will be achieved continues to limit near-term investment,” she said.
“[It] could ultimately lead to a more pronounced fall in investment should the final terms of land reform be onerous to businesses.”

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