Jobs: ‘govt crowding out private sector’

2011-09-13 00:00

EMPLOYMENT conditions remain “exceedingly weak”, suggesting that an improvement in permanent jobs, which tend to lag temporary jobs, is a long way off.

The Adcorp Employment Index for August, released yesterday, notes that the decline last month translates into an annual job loss rate of 49 306 workers.

Adcorp attributes the decline to the government “crowding out private sector participation in the economy”. While overall employment declined by 2,1% in August — the fourth consecutive monthly decline — employment by the government continued to rise, by a notable 6,2%.

Said Loane Sharp, Adcorp labour market analyst, “The public sector now accounts for all the job creation in the economy for 2011 as a whole.”

Adcorp found that employment in August declined most sharply in the manufacturing (19,9%), mining (19,3%) and construction (16%) sectors.

The informal sector continued to create jobs, employing 16 917 additional people in August, enhancing the “informalisation” of the country’s workforce.

Sharp said temporary employment figures are closely associated with the economy’s underlying health and can be considered a leading indicator of permanent employment conditions.

“In August the capacity utilisation of temporary staff — the number of hours actually worked in relation to the number of hours per temporary worker — dropped to 74,6%, a decline of 8,1% at an annual rate and the worst decline in four months.

“Compared to a year ago the number of temps increased by 4,5% in August, but their average monthly working hours declined by 20,6%, prompting our ‘exceedingly weak’ prediction for the permanent jobs outlook,” Adcorp said. — WR.

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