All the odds seem to be heavily stacked against South Africa’s goal of halving unemployment by 2014, industry players said late on Tuesday.
Statistics SA’s employment statistics for the third quarter showed that while the jobs tally in the sector rose by 0,4%, or 35 000 jobs, in the third quarter of 2008, it was slower than the 0,6%, or 40 000 jobs, rise in the second quarter of the year.
While officials and unions argue about the country’s exact unemployment rate, with officials pegging it at 23,3% and unions putting it at 40%, it remains among the highest in the world.
“It seems virtually impossible to meet government’s growth needs of halving unemployment and poverty by 2014,” said Shereen Darmalingam, an economist at Standard Bank.
In October the African National Congress (ANC) reiterated that it would slash unemployment by half through the creation of five million jobs by 2014, as it outlined economic priorities ahead of next year’s elections.
But over the past six years, only two million jobs have been added, translating into roughly 350 000 jobs on average each year.
This is far below estimates of around 500 000 jobs required annually for the target to be reached.
“The slowdown in job creation gives very little comfort because it does not take into account mass retrenchments announced in the past few weeks,” said Patrick Craven, spokesperson for the ANC-affiliated Congress of South African Trade Unions.
As the global economic slowdown hits home, sectors from the mining to auto industry are reviewing capital expenditure plans, cutting down production and embarking on mass retrenchments to cut costs.
Strong caution
“The South African labour market is in for a challenging year ahead as local companies strive to keep their heads above water,” said Darmalingam.
Underscoring these predictions are the latest surveys by employment services industry consultants Manpower and auditing firm KPMG, which both expect difficult times to continue well into 2009.
“Employers are becoming even more cautious in hiring in light of the current economic climate,” said Jan Coetzee, Manpower South Africa managing director, on Tuesday at the release of the company’s Employment Outlook Survey of local hiring trends.
According to the survey, the net employment outlook for South Africa has declined by four percentage points from the fourth quarter of 2008 to +13%, the weakest hiring intentions since the survey began in South Africa in the fourth quarter of 2006.
This net employment outlook figure is derived by taking the percentage of employers anticipating total employment to increase, and subtracting from this the percentage expecting to see a decrease in employment at their location in the next quarter.
Last week a KPMG survey showed that more than a quarter of local businesses plan to lay off workers as higher interest rates and slowing economic growth eat into their profits.
“It’s going to get worse before gets better,” said Jaco Kleynhans, spokesperson for trade union Solidarity, adding that the official unemployment rate could hit 25% by the middle of next year.
Solidarity, which disclosed this week that 32 companies are axing 22 000 workers, expects the number to rise drastically with the mining and auto sectors accounting for the bulk of job losses. — I-Net Bridge