Employment bloodbath in South Africa with 97,000 jobs lost in one year

Relative to a year ago, employment in South Africa has fallen by 97,000 jobs, reflecting the country’s weak economy. 

According to the Quarterly Employment Survey released today, recovery in employment from the Covid-19 pandemic remains incomplete, with employment still lower by 259,000 jobs compared to the first quarter of 2019.

In the first quarter of 2023, employment in the formal non-agricultural sectors of the economy contracted by 21,000 jobs, a 0.2% quarter-on-quarter decline.

It brings the total number of job losses for the year to the end of March to 97,000.

Many jobs shed were in trade, which aligns with post-festive season layoffs. Job losses were highest in trade (-36,000 or -1.6% q/q), followed by business services (-32,000 or –1.4%), transport (-2,000 or -0.5%) and construction (-2,000 or -0.4%). 

However, employment gains were recorded in community services (41,000 or 1.5%), followed by mining (5,000 or 1.1%), manufacturing (4,000 or -0.3%), and electricity (1,000 or 1.8%).

Full-time employment declined by 63,000 jobs quarter-on-quarter and 24,000 or -0.3% year-on-year. Most jobs lost in business services, and transport were full-time jobs, while trade shed primarily part-time jobs. 

Part-time employment increased by 42,000 or 3.8% quarter-on-quarter, led by the community services sector, but jobs have been lost compared to last year.

Total gross earnings declined by 4.0% quarter-on-quarter but are 5.5% higher than a year ago and have firmly surpassed Q1 2019 levels by 18.6%. 

“Many sectors had lower basic salary/wage payments compared to last quarter, signalling constrained profit margins as the cost of doing business has lifted amid a challenging economic climate,” according to FNB.

Only the construction sector recorded a contraction in basic salary payments compared to last year. Overall average monthly earnings (including overtime and bonuses) are down by 2.7% quarter-on-quarter but up 6.8% year-on-year. 

“Inflation-linked wage adjustments should support growth in nominal compensation, but real incomes in many industries are likely to remain under pressure.”