Statistics South Africa’s latest employer survey shows the formal non-farm sector lost a net 14,000 jobs between March and June, and the split behind that number matters more than the number itself. Full-time employment fell by 40,000 in the quarter. Part-time employment rose by 26,000. The net loss is what remains after part-time posts offset part of the full-time decline, according to the Quarterly Employment Statistics release published on 29 September. The decline in formal sector jobs is concentrated in manufacturing, business services, trade and transport.
What the survey counted
Total formal non-farm employment slipped from 10.439 million in March to 10.425 million in June, a fall of 0.1%. Over the year to June it is down 95,000, or 0.9%. Manufacturing shed the most, at 20,000 jobs or 1.6%, followed by business services (13,000), trade (8,000) and transport (5,000). Community services added 29,000, while electricity, mining and construction each added 1,000, Business Day reported.
The survey asks employers what they pay and to whom, so it tracks payrolls at registered firms and government. It is a different exercise from the household-based labour force survey behind the headline unemployment rate, which also captures informal work. The two should not be read as one series. Unemployment rose to 33.6% in the second quarter from 32.7% in the first, as we reported when the GDP and unemployment figures came out.
Full-time out, part-time in
Full-time employment fell from 9.37 million to 9.33 million, and is down 1% on a year earlier. IOL reports that business services and manufacturing each lost 17,000 full-time jobs in the quarter, trade lost 7,000 and transport 6,000. Part-time employment rose 2.4% to 1.095 million, though it is up only 0.1% on a year ago.
Almost all of the part-time growth came from one place. Community services, which includes public and social services, added 32,000 part-time jobs, and business services added 4,000. Community services alone added more than the 26,000 net gain, which means part-time employment shrank across the rest of the economy taken together. That is our arithmetic from the published figures, not a line in the release.
For a small business owner, the pattern is a reminder of where hiring is happening. The industries that grow payrolls in this data are not the ones that sell to businesses or make things. Those are the parts of the economy where the full-time losses are concentrated.
Pay: a smaller pot, mostly because of bonuses
Gross earnings paid to employees fell by R4.8 billion, or 0.5%, in the quarter to R1.025 trillion. Compared with a year ago, gross earnings are up R35.1 billion, or 3.5%. IOL quotes the agency as saying the quarterly decrease was driven by a sharp contraction in bonus payments of R23.1 billion, with business services showing the biggest fall, followed by mining and transport. Business Day adds that workers in business services, mining and transport took wage losses while those in community services, trade, construction, manufacturing and electricity earned more.
Why hiring is slow
The backdrop is a weak economy. GDP contracted 0.2% in the second quarter, the first contraction in six quarters, and Business Day says businesses have been reluctant to hire this year as they deal with higher input costs linked to the US-Iran war, which has pushed up domestic fuel prices since April. Our earlier coverage of the Reserve Bank lifting the repo rate to 7.25% shows how the same fuel shock is also raising borrowing costs, and of what a rising October fuel price means for operating costs.
Business Day’s assessment is that economic growth is too weak to create new jobs. TimesLIVE carried the same release. The direction of travel is clear enough for planning: payroll growth is coming in the shape of part-time and public-sector work, not permanent posts in trading and production firms.
What to watch
The next quarterly employment statistics will show whether the full-time decline continues or whether this quarter is an adjustment to a weak second quarter. The next labour force survey will show how much of the loss is landing in unemployment. Owners setting pay and headcount for the coming year can compare their own turnover of full-time staff with these numbers, and check how the tax burden on the average salary weighs on what a permanent hire really costs. Source figures and the industry breakdown are in the release linked above.
