Johannesburg, 26 September 2019 – The latest data for the Quarterly Employment Statistics (QES) released by Statistics South Africa (Stats SA), which reflects a dip in the number of formally employed people in the country, is disappointing, the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) said today.

The Stats SA data showed that employment in the domestic economy decreased by 2 000 quarter on quarter, from 10 174 000 in March 2019 to 10 172 000 in June 2019. The largest contributor to the quarterly decrease was the manufacturing sector, losing 15 000 jobs in June 2019. There were also decreases in job numbers in the business services (14 000 jobs), trade 10 000 jobs), construction (9 000 jobs) and electricity (1 000 jobs) sectors.

Speaking after the release of the numbers, SEIFSA Economist Marique Kruger said an analysis of the preliminary estimates shows that the broader manufacturing sector, including its heterogenous metals and engineering (M&E) cluster of industries, lost 1.2 percent of total employment (15 000 jobs) in the second quarter of 2019, with employment decreasing from 1 224 000 in March 2019 to 1 209 000 in June 2019. Over a longer time-frame, between the second quarter of 2018 and the second quarter of 2019, a total of 1 000 jobs were lost in the manufacturing sector, a decrease of 0.1 percent.

“The decrease in formal employment numbers in the South African economy is discouraging, especially given the decreasing contributions of labour-intensive sectors such as manufacturing, construction and agriculture to Gross Domestic Product (GDP),” Ms Kruger said.

She said businesses in the manufacturing sector are struggling and continue to face headwinds amid increasing input costs, underpinned by a volatile exchange rate, increasing energy and fuel prices and rising operational costs. She said businesses were left with very little lee-way but to pass cost increases on to the market, and are consequently forced to take drastic measures to survive, thereby compounding existing socio-economic problems.

“The current challenging operating environment, therefore, highlights the importance of stakeholders continuing to engage to seek sustainable solutions to the persistent and difficult business conditions,” she 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