The robust performance of the South African economy during the past three years paved the way for significant employments gains, according to the South African Reserve Bank’s (SARB) quarterly report released on Thursday.
“From the most recent lower turning point in the employment cycle, ie the second quarter of 2003, enterprise-surveyed formal non-agricultural employment increased by around 528Â 000 up to the third quarter of 2006. Of this increase, 200Â 000 jobs were created during the year to September 2006, an increase of 2,7%,” the report shows.
Employment growth in the public sector marginally outpaced employment gains in the private sector over this four-quarter period, the report notes.
According to the enterprise-based quarterly employment statistics, compiled by Statistics South Africa, employment growth occurred at an annualised rate of 3,9% in both the private and public sector in the third quarter of 2006.
In the public sector, employment numbers surged at local government level, following five consecutive quarters of decline. Employment growth also continued in other tiers of the public sector, although at a slower pace.
In the private sector, the sturdiest employment increases occurred in the transport, storage and communication sector, followed by the finance, insurance, real-estate and business services sector as well as the construction sector, the report found.
Employment in the manufacturing sector, however, fell slightly during this period, while the electricity-generation sector suffered a more substantial loss in employment opportunities.
Salary increases
The SARB also said the pace of salary increases, in nominal terms, in the formal non-agricultural sector accelerated rapidly from a year-on-year rate of 4,4% in the fourth quarter of 2005 to 7,3% in the first quarter of 2006 and 8,1% in the third quarter.
“Accelerated nominal wage growth resulted from double-digit increases in remuneration per worker in a diverse set of sectors, namely electricity generation; manufacturing; gold mining; community, social and personal services; transport, storage and communication; and national government departments,” the report showed.
It noted that the increases were, however, partly offset by more subdued rates of wage growth in the non-gold mining and manufacturing sectors as well as the trade, catering and accommodation services sector.
Output growth in the economy outpaced employment gains in recent quarters, leading to acceleration in labour productivity growth from 1% in the year to the first quarter of 2006 to 2,6% in the year to the third quarter.
But the rise in labour productivity over the past quarters fell short of the average labour productivity growth of 4,1% reached in 2005.
Labour productivity
Labour productivity growth in the manufacturing sector also slowed from an average annual rate of 5% in 2005 to year-on-year rates of about 3% in the first three quarters of 2006.
“In contrast with the preceding two years, when labour productivity growth in the manufacturing sector clearly set the pace, recent productivity growth in manufacturing exceeded that in the formal non-agricultural sector of the economy only by a slender margin,” the report noted.
The rate of increases in nominal unit labour cost — that is, the cost of labour per unit of production — accelerated meaningfully from a year-on-year rate of 3% in the second quarter of 2006 to 5,3% in the third quarter.
Changes in nominal unit labour cost normally precede or coincide with changes in consumer price inflation. Growth in nominal unit labour cost in the manufacturing sector, however, slowed to a year-on-year rate of 2,5% in the third quarter of 2006, mainly due to labour productivity growth that slightly exceeded remuneration growth in the sector over this period.
The average level of wage settlements in collective bargaining agreements increased marginally from 6,3% in 2005 to 6,5% in 2006. Settlements in 2006 ranged from 4,6% to 9,7%.
The average minimum monthly wage per worker across all sectors over the year to December 2006 amounted to R3Â 065, with sector minima ranging from R1Â 200 in the retail sector to R6Â 007 in the transport sector.
Apart from these sector minimums, minimum monthly wages as stipulated by governmental sectoral determinations applying to domestic and agricultural workers amounted to R1Â 067 from December 1 2006 and R989 from March 1 2007 respectively.
The annual increase in the minimum monthly wage for domestic workers amounted to 7%, while that for agricultural workers in the rural areas amounted to 11,8%. — I-Net Bridge