Economy picks up, but job creation ‘sluggish’

The creation of jobs has been sluggish even though there has been some improvement in the domestic economy in the past 18 months, the SA Reserve Bank said in its March Quarterly Bulletin released today.

“The pace of employment creation remained sluggish, despite the recovery in domestic economic activity during the past year and a half,” the central bank said.

Formal, non-agricultural employment increased moderately in the third quarter of last year, following a more significant increase in the second quarter.

It showed a seasonally adjusted and annualised increase of 0.2% and added some 4 800 jobs to the economy.

However, employment levels in the private sector remained roughly unchanged in the third quarter of last year, compared with the preceding quarter.

About 300 jobs were lost in this sector.

The reserve bank said employment levels in the public sector continued to increase, albeit more slowly than in the second quarter.

The public sector created about 5 100 jobs, especially at provincial level.

The bank said job losses in the construction sector continued in the third quarter of last year, while employment in manufacturing was also down in the second and third quarters of the year.

However, employment growth in the non-gold mining sector “accelerated robustly” last year. It rose from a seasonally adjusted and annualised rate of 5.1% in the fourth quarter of 2009 to 8.4% in the third quarter of last year.

“Mining activity benefited from increased global demand for commodities, stemming from enhanced economic growth in especially emerging-market economies, notably Brazil, China and India, leading to a revival in commodity prices following the slump in 2008 and 2009.”

There was a steady increase in jobs in the electricity-supply sector, with around 2 300 jobs added in the second and third quarters of last year.

About 18 500 jobs were created in the trade, catering and accommodation services sector in the third quarter of last year, following virtually no employment gains in the preceding quarter.

Employment in the public sector increased by 13.2% from the first quarter of 2005 to the peak of the employment cycle in the third quarter of 2008.

Over the same period, private sector jobs rose by only 9.1%. Overall; formal, non-agricultural employment increased by 10% over this period.

During the downward phase of the employment cycle, private-sector employment contracted 6.6% to the first quarter of last year, whereas public-sector employment increased 2.9%.

“Consistent with the requirement for accelerated service delivery in the country, the recent expansion of the public-sector staff complement occurred primarily at provincial and local government level.” 

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