Economic crisis could lead to 300 000 job losses

The economic crisis could lead to over 300 000 job losses, economist Mike Schussler said in the 8th United Association of South Africa (UASA) Employment Report released on Tuesday.

“We forecast a GDP decline of 1,3% for 2009,” Schussler said, adding that this would lead to between 207 000 and 304 000 job losses.

He explained the crisis could hit “across the board”, but the technical and management sectors might not feel the same effect as most categories.

“Elementary workers would be hardest hit while manufacturing, durable sales, mining and construction would feel the worst effects of the crisis.”

Schussler said small companies had been slammed with an increase of 140% in liquidations in 2008.

“The number of jobs lost in the motor industry outside of manufacturing [that is, sales and workshops] was 37 000 in 2008.”

He said in 2008, some 1 400 restaurants had closed their doors.

Earlier on Tuesday, Statistics South Africa released its latest Quarterly Labour Force Survey which Schussler described as “realistic”.

According to the Quarterly Labour Force survey, the country’s jobless rate increased to 23,5% in the first quarter of 2009 from 21,9% in the previous three months.

In the first three months of this year, the number of people out of work rose to 4,184 million from 3,87 million previously, the survey found.

According to Schussler, jobs could only be created if GDP rose to beyond 4%.

However, the South African economy shrank in the fourth quarter of 2008 by 1,8% as manufacturing took a hammering and the South African Reserve Bank now saw a further contraction in the first three months of this year.

“GDP will turn positive next year,” Schussler said.

“We could get 2% growth in 2010, but this is not enough to create jobs.

“For that we need 4% growth and we should see this in 2011 or 2012.”

Turning to the possible creation of jobs by the 2010 World Cup soccer tournament, Schussler said the event would provide “only temporary relief”.

“However, it’s a good promotional opportunity for the country as after the 1995 Rugby World Cup tourism picked up,” he said.—Sapa