Thank God for government jobs

2013-12-15 14:00

Stats SA this week released the last series of important economic data for the year. Dewald van Rensburg looked for silver linings amidst bad new on the jobs front and signs of a spendthrift Christmas

If the government is serious about capping the size of the civil service, new jobs may go from scarce to nonexistent.

The latest formal sector jobs numbers released by Stats SA this week again underline the country’s shrinking industrial base – and the overwhelming importance of government jobs for softening the unemployment crisis.

In the third quarter of the year formal, nonagricultural jobs grew by 16?000, according to the Quarterly Employment Statistics produced by surveying employers.

Altogether 15?000 of those were in the “community, social and personal services” category, which largely consists of the state. The private service sectors also created jobs on a more modest scale, but mining, manufacturing, utilities and construction all shed jobs.

Between the beginning of the year and the end of September, South Africa lost 1?000 formal jobs, according to the survey.

Even more worrying is where the jobs were lost.?Community and personal services actually gained 33?000 jobs.

Transport, wholesale and retail, construction, manufacturing and mining together shed an equivalent amount of jobs.?The ongoing deindustrialisation of South Africa remains apparent in the manufacturing job statistics with the sector’s job count inching to a new low of 1?143?000.

Even before the economic crisis, manufacturing jobs were disappearing with the high-water mark set in 2006 at about 1?334?000.

Much of the recovery in overall employment since the economic crisis has taken the form of service jobs in the state compensating for continuing declines in manufacturing.

“Community and personal services” now provide 28.4% of jobs compared with 25.1% in 2008.

More depressing economic news comes from the retail sales data for October. Sales grew by 1.3% year on year and dropped from September.

Retail reflects private consumption, which in turn makes up two-thirds of the gross domestic product. These figures point to a bad Christmas sales season and low economic growth.

The large “general dealer” category in the retail figure fell 0.4%, dragging the total down. This part of the number reflects middle- to lower-income households’ expenditure and confirms what we know about consumers’ falling credit, noted Kamilla Kaplan from Investec.

Stats SA also released new manufacturing data for October, showing that motor manufacturing rebounded quickly after the September strike. Overall manufacturing grew 1.5% compared with October 2012, which was far better than the negative 2.2% that had been predicted or the -3.3% in September. The positive figure comes mostly from food products, the car factories, and the basic iron and steel sector.

Stats SA this week also estimated November’s inflation at a lower-than-expected 5.3%.

The consensus expectation among economists had been 5.4% and the path is now set for overall inflation for the whole year to come in lower than the all-important 6% threshold at 5.7%, Shireen Darmalingam, Standard Bank’s macroeconomic strategist, said in a note.

Red lights had been flashing earlier this year as inflation rose above the Reserve Banks’s upper-limit target of 6%. The major driver was the weakening rand, which increases the cost of imports, including oil.

In November, the petrol price temporarily retreated by 23c a litre, but it has since risen by 17c again. Food inflation also dropped in the same month.

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