SA formal sector sheds thousands of jobs

South Africa’s formal sector is shedding thousands of jobs. According to the Quarterly Employment Survey (QES) released by Stats SA, 97 000 jobs were lost year-on-year in March this year.

The decreases were largely seen in trade, business services, transport and construction. The QES measures trends in the non-farm formal sector of the economy by surveying employers. The data shows that on a quarter-on-quarter basis total employment decreased by 21 000 between December last year and March this year.

Dawie Roodt, Chief Economist at Efficient Group, says despite some economic growth in the first quarter of this year, the overall employment picture remains bleak for the country.

The economy recorded job losses in the first quarter of this year. The trade industry is one of the sectors that contributed to the high number of job losses in this period. According to Stats SA — this is due to the end of contracts and lay-offs of workers employed during festive season.

“The actual number of people employed in South Africa actually fell in the first quarter. Of course, there are many reasons for that. There are all sort of leads and lags in the economy. But what is interesting is that the number of permanently employed people actually did for the number of temporary employed people actually increase, so I think there are a couple of things that work at the moment. The one is that businesses are uncertain and therefore they are not employing people permanently rather than a temporary basis.”

Roodt says job losses are expected to continue throughout this year.

“Underlying economic growth in South Africa, despite some economic growth in the first quarter. is actually quite weak. In fact, most economists expect the economy to grow or hardly to grow at all during this year, and I’m afraid that’s simply does not bode well for employment in South Africa. So I’m afraid the levels of unemployment are likely to remain elevated and may actually increase over the next couple of quarters.”

Part-time employment increases

Stats SA Quarterly Employment Statistics Director Matlapane Masupye says while full-time employment saw a decrease in this quarter while part-time employment saw an increase of 42 000.

“However, some industries showed a positive growth, with construction and manufacturing and mining each experiencing an increase of 5000 jobs each. The electricity sector recorded an increase of 1000 job year on year. Full time employment registered a decline of 24,000 jobs. Part-time employment recorded and increase with of 42,000 jobs quarter on quarter, rising from 1,110,000 in December 22 to 1,152,000 in March 2023. The community services industry emerged as the contributor with 46,000. Followed by business services with an increase of 25,000 jobs. Lastly, the transport industry saw a moderate rise of job with 1000. Meanwhile, the electricity industry maintain its employment level with no totally change.”

According to Stats SA the increase in the part-time jobs was due to the resumption of the Presidential Youth Employment Initiative project and the recruitment of Expanded Public Works Programme workers in Gauteng.

Yet more people lose their jobs in the formal sectors of the economy:

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