Johannesburg, 25 June 2019 – The Steel and Engineering Industries Federation of Southern African (SEIFSA) is encouraged by the Quarterly Employment Statistics (QES) data, reflecting an increase in the number of people formally employed in South Africa, Economist Marique Kruger said today.

According to the data released by Statistics South Africa this morning, formal employment in the local economy increased from 10 152 000 in December 2018 to 10 174 000 in March 2019, an increase of 22 000 jobs
quarter on quarter. The largest contributor to the quarterly increase in job numbers was the community services sector, gaining 19 000 jobs in March 2019. Furthermore, there were increases in job numbers in the mining and quarrying sector (6 000 jobs), the manufacturing sector (5 000) and the business services sector (5 000 jobs).

An analysis of the preliminary estimates indicates that the broader manufacturing sector, of which the metals and engineering (M&E) cluster of industries forms an integral part, gained 0.4 percent of total employment (5 000 jobs) in the first quarter of 2019, with employment increasing from 1 222 000 in December 2018 to 1 227 000 in March 2019. Over a longer time frame, between the first quarter of 2018 and the first quarter of 2019, an encouraging total of 9 000 jobs were gained in the manufacturing sector, an increase of 0.7 percent.

“However, the concern is that the increase in formal employment numbers is unsustainable, as underlying industry dynamics and contribution to GDP are deteriorating,” Ms Kruger cautioned.

She said that businesses are under duress, mainly rowing against high tides and headwinds comprising a plethora of challenges, including increasing intermediate input costs, a volatile exchange rate, comparatively high fuel prices, operational costs and the new carbon tax. These constraints leave companies with little room to pass cost increases on to the market, compelling them to lay off workers in order to cut operational costs in the medium to long term.

“Given the prevailing difficulties, it is, therefore, important for captains of industry and policy makers to engage continuously and seek sustainable solutions aimed at addressing the existing challenges which, if ignored, may reverse the gains made and compound the scourge of unemployment,” Ms Kruger concluded.

SEIFSA is a National Federation representing 21 independent employer Associations in the metals and engineering industries, with a combined membership of 1600 companies employing around 200 000 employees. The Federation was formed in 1943 and its member companies range from giant steel-making corporations to micro-enterprises employing fewer than 50 people.