By Koketso Mano
More jobs lost in the formal economy in 1Q24
Employment in the formal non-agricultural sectors of the economy, as reflected in the Quarterly Employment Survey, contracted by over 60 000 jobs or -0.6% q/q in 1Q24. Many of the jobs shed were in trade and it was more than just post-festive layoffs of part-time workers. Compared to 1Q23, 70 000 jobs (0.6%) have been lost but over 400 000 jobs have been added since 1Q19. The latest estimates reflect 10.7 million workers in the formal economy.
Job losses were recorded in trade (-57 000 or -2.4% q/q), followed by community services (-18 000 or -0.6%), business services (-4 000 or -0.1%), and mining (-3 000 or -0.5%). Meanwhile, employment gains were recorded in manufacturing (13 000 or 1.0%), followed by transport (2 000 or 0.5%). Full-time jobs declined by 29 000 q/q and 16 000 or 0.2% y/y. Most of the jobs lost in trade and community services and those added in manufacturing were full-time jobs. Part-time employment decreased by 38 000 or 3.1% q/q and 58 000 have been lost compared to 1Q23 (-4.7%). There were approximately 1.2 million part-time workers and 9.5 million full-time jobs in 1Q24.
Total gross earnings declined by 3.5% q/q but were 4.8% higher than in 1Q23. Notably, earnings were 36.8% higher than 1Q19 levels, beating inflation of 28.4%. Basic salary/wage payments were broadly lower compared to the previous quarter but 5.0% higher than 1Q23. Overall average monthly earnings (including overtime and bonuses) were down by 0.1% q/q but 4.7% higher than a year ago.
Outlook
South Africa's political landscape remains uncertain, but joblessness should be top of mind as the seventh administration is formalised. Continued progress in structural reform and improved local growth over the medium term is paramount to employment creation. Furthermore, as inflation subsides over the next year, profitability and spending power should improve. Ultimately, after two years of cost-of-living pressures, jobs and income would be the most meaningful relief to households.
Selected sector analysis
Speaking of structural reforms, there are some interesting takeaways from formal employment trends since 2009. While the lingering impact of the Global Financial Crisis, lockdowns, and geopolitical tensions, missteps by the state, and resultant structural issues, have impacted most of the economy, some sectors have still managed to add a considerable number of jobs. Interestingly, the construction, trade, and business services sectors have added the most jobs. Trailing not far behind were the community services and transport sectors.
Concerningly though, the construction sector has been battling with security and demand issues, which include the state's poor follow-through on infrastructure spending. This highlights that the failure to address mounting stresses that have weighed on South Africa's business climate could force a reversal in some of these gains. A key example are the sectors most affected by load-shedding, which are utilities, manufacturing, and mining.
