Johannesburg, 31 March 2020 – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes the latest Quarterly Employment Statistics (QES) data, which reflects gains in the number of formally employed people in South Africa.
The Statistics South Africa (Stats SA) data – which comes from an enterprise-based sample survey – showed that employment in the domestic economy increased by 16 000 quarter-on-quarter, from 10 197 000 in September 2019 to 10 213 000 in December 2019. The largest contributor to the quarterly increase in job numbers was the trade sector, gaining 39 000 jobs in December 2019. Furthermore, there were increases in job numbers in the business services sector (12 000 jobs) and the community services sector (3 000 jobs).
Speaking after the release of the data by Stats SA this morning, 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 0.3 percent of total employment (4 000 jobs) in the fourth quarter of 2019, with employment decreasing from 1 213 000 in September 2019 to 1 209 000 in December 2019. Over a longer time frame, between the fourth quarter of 2018 and the fourth quarter of 2019, a discouraging total of 24 000 jobs were lost in the manufacturing sector, a decrease of 1.9 percent.
“However, the caveat is that the gains in formal employment numbers in the South African economy is not sustainable, especially given the decreasing contributions of labour-intensive sectors such as manufacturing, construction and agriculture to Gross Domestic Product (GDP), Ms Kruger said.
Moreover, 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.
“Businesses are, therefore, left with very little lee-way to pass on cost increases on to the market, and are consequently forced to take drastic measures to survive, thereby compounding existing socio-economic problems,” she said.
Ms Kruger said that the current challenging operating environment, including the global coronavirus pandemic, makes it imperative for stakeholders to continuously engage in efforts to seek sustainable solutions to the persistent and difficult business conditions.