In reaction to the latest Adcorp employment index – which indicated an annualised slump of 3.1% in unemployment for May 2012 after registering growth for successive months – financial analysts painted a bleak outlook for the South African economy on Monday.
“There is definite evidence of a downturn in our tacit recovery from the 2008 global financial crisis. Based on these figures, one can’t predict a rosy outlook for the unemployed or those in search of work,” Chris Hart, chief economist at Investment Solutions told the Mail & Guardian.
The index showed a drop in jobs growth across all sectors, with the sharpest declines recorded in transport (12.7%) and mining (12%).
The indicator also suggested a further setback could be in the offing as the number of temporary jobs totalled 3.93-million – 30.2% of the country’s workforce.
This could easily lead to a larger spike in unemployment if those temporary posts were rescinded.
“All sectors are struggling to normalise their workforce to pre-recession levels. We are starting to see what we really are facing in terms of the challenging position the world’s economy finds itself in,” Shireen Darmalingam, Standard bank economist said.
Darmalingam said there was no “quick-fix” to the situation as South Africa’s largest trading partners in Asia and Europe faced economic constraints.
“In as much as we would like to simply create jobs in situations like this, it is often out of our control. Europe is currently facing the real possibility of entering another recession and China also looks set to cool down in terms of economic growth,” she said.
This was echoed by Absa Capital senior economist Gina Schoeman, who added South Africa did not have the capacity to stave off joblessness.
“There may be good intention and willingness on the government’s part to grow the economy and employment but we don’t have the local employment infrastructure to soak up any unemployment that is directly created through downturns in Europe and in Asia,” Schoeman said.
Schoeman said South Africans should not expect any employment respite for the foreseeable future.
“Things are likely to get a whole lot worse before they get any better,” Schoeman added.