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Very small employment increase in Q4

Labour analyst Andrew Levy says where the jobs were created will not grow enough jobs to dent overall unemployment.

NASTASSIA ARENDSE:  According to the quarterly employment statistics survey, formal non-farm employment increased by 81 000 jobs in the fourth quarter, and the largest quarterly job gains were registered in the trade, financial and government sectors. I spoke to Andrew Levy, who is a labour analyst at Andrew Levy Employment Corporation.

ANDREW LEVY:  First one’s always got to look a little more deeply at the numbers themselves. The first thing is that is a very, very small employment increase in the quarter, but as I always say, one’s got to be careful of short-term figures. What is a little bit more concerning is if you look at the year-on-year comparable figure; then in point of fact it’s almost nothing, it’s 0.2%. So if you look in the longer term, which is really what we are looking at because we are talking about sustainable jobs, it’s not so encouraging.

The other thing is, trying to be positive, if you look at where the jobs were created, they were in the tertiary or the service sector – business services, community services and trade – this was in point of fact the area where you do tend to see more growth, but ultimately it’s not going to grow jobs in the kind of numbers that are going to make a dent in our overall figures. Those come from manufacturing and, if you look at where they have in fact decreased, then it’s again the core of our productive economy, they gone down in construction, they’ve gone down in mining, and they’ve gone down in transport. So that’s a little worrying.

The other thing that’s a little bit worrying is, if you broke the data between the public sector and the private sector, it does appear that of the increases that were reported 1.9% were created in the public sector and 1.5% in the private sector. You’ll know the public sector is bloated, it’s over-employed, and it needs to cut down. So in reality it’s not necessarily the best private job growth. But, having said that, any growth in employment is better than the loss of one job. So I think we ought to be a little bit comforted.

…. It’s no sort of error that the announcement today by the state president and by Mr Stephen Koseff of Investec of the new “Yes” programme is timed to meet the same date as these figures. And I think that that particular initiative gives us something to look forward to, something to be optimistic about. And generally I am hopeful that the year will see an overall increase in employment, in sustainable employment, and in the private sector, which is really where we need the jobs.

NASTASSIA ARENDSE:  A lot has happened in the past couple of months. We have seen some positive changes on the business confidence side. Do you see that having a material dent in the construction, mining and transport industries going forward, considering that Moody’s has changed the outlook from negative to stable in the hope, I suppose, that growth plays a part as well in the country?

ANDREW LEVY: Yes. I think Moody’s tends to be optimistic. I think we’ll see a recovery in construction and transport before we’ll see it in mining. But I have hopes to see that our GDP growth this year will be higher than what was thought of initially when Mr Zuma was still in power. And I think that if we do see an improvement in GDP growth then we know construction will follow. Logistics are at the heart of moving goods in our economy and that would follow.

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