South African economy needs to be boosted


By Thandisizwe Mgudlwa

Manpower Employment Outlook Survey has just released a report which does not look good for economic development and hence, job creation for South Africa.

The study states that following a cautiously optimistic third-quarter recovery, South Africa’s hiring pace is expected to slow down noticeably in the last four months of the year, according to the 750 employers who participated in the survey.

And once seasonal variations are removed from the data, South Africa’s Net Employment Outlook stands at a disappointing 0%, a 7 percentage point decline quarter-over-quarter and a 3 percentage point decline year-over-year.

Further, opportunities for job seekers are expected to be generally weaker in most sectors and regions, especially in the Electricity, Gas & Water Supply and the Restaurants & Hotels industry sectors where the Outlooks drop to their weakest levels since the survey started in 2006.

Lyndy Van Den Barselaar – Managing Director for Manpower Group South Africa has said: “The results are somewhat downbeat; the encouraging nature of the 3rd quarter Outlook has given way to a relatively stagnant forecast once again.
Lower interest rates have not had the desired effect on consumer spending and borrowing and consumer confidence remains low.

This, in turn, has affected business confidence, which has dropped to a 12-year low and is affecting business employment plans. The on-going trend of indecision with regards to the Eurozone crises and fluctuating degrees of confidence and doubt, as well as key negative events–such as the recent Lonmin mine debacle–that alarmed foreign investment, continues to cause businesses to be cautious in their hiring plans.”

Van Den Barselaar explained: “Businesses are expecting a sluggish holiday season and are not anticipating the boost that often bolsters sales at the end of the year. Additionally, other developing nations are outperforming South Africa as some political instability and indecision continues to concern business back home, especially with the upcoming elections next year. Fourth-quarter hiring intentions decline in nine of 10 industry sectors and in four of five regions in a quarter-over-quarter comparison. Opportunities for job seekers are strongest in the Free State where mining may contribute to the regions positive figures.”

Employers in three of the five regions surveyed expect to grow staffing levels during Quarter 4 2012. The most optimistic hiring plans are reported in Free State, with a Net Employment Outlook of +6%, and Gauteng employers anticipate some payroll gains with an Outlook of +3%.

Meanwhile, employers in Kwazulu Natal forecast a struggling labour market with an Outlook of -6%, and report the weakest regional hiring plans for the third consecutive quarter.

In addition, quarter-over-quarter, hiring prospects weaken in four of the five regions, according to employers.

The Eastern Cape Outlook declines by 7 percentage points, and decreases of 4 percentage points are reported in both Gauteng and Western Cape. Elsewhere, Free State employers report a slight
improvement of 2 percentage points.

Year-over-year, the Outlook weakens in four of the five regions. Kwazulu Natal employers report a decline of 6 percentage points, and the Outlooks for Western Cape and Eastern Cape decrease by 4 and 3 percentage points, respectively.

Meanwhile, Free State employers report a 5 percentage point Outlook improvement.

For the second consecutive quarter, hiring intentions are strongest among employers in the Wholesale & Retail Trade industry sectors while employers in the Manufacturing industry sector report the least optimistic fourth-quarter hiring intentions.

Outlooks in both the Electricity, Gas & Water Supply and the Restaurants & Hotels sectors are the least optimistic forecasts since the survey began in 4Q 2006.

Furthermore: “Despite low consumer confidence, many businesses still see opportunities for consumers to increase spending, especially in the essential categories, such as food and clothing. However, many consumers have cut back on luxury purchases such as eating out and going on holidays. Similarly, many businesses have cut back on travel budgets for employees, effecting accommodation expectations.

Manufacturing has been affected by less consumer spending, as well as cheaper foreign imports in some sectors,” added Van Den Barselaar.

Employers in five of the 10 industry sectors expect to grow payrolls in the next three months. The most optimistic hiring plans are reported by employers in the Wholesale & Retail Trade sector, with a Net Employment Outlook of +5%, and in the Agriculture, Hunting, Forestry & Fishing sector, where the Outlook stands at +4%.

Elsewhere, modest headcount gains are likely in both the Mining & Quarrying sector and the Public & Social sector, according to employers who report Outlooks of +3%. However, employers in four sectors predict negative headcount growth, most notably in the Manufacturing sector where the Outlook stands at -9%.

While restaurants & Hotels sector employers also expect a sluggish hiring pace, reporting an Outlook of -4%.

Quarter-over-quarter, hiring intentions weaken in nine of the 10 industry sectors. The most noteworthy decline of 12 percentage points is reported in the Manufacturing sector. Outlooks decline by 7 percentage points in both the Construction sector and the Wholesale & Retail Trade sector. In the Transport, Storage & Communication sector, employers report a 6 percentage point decline quarter-over-quarter.

Year-over-year, employers report weaker hiring plans in eight of the 10 industry sectors. The Outlook for the Restaurants & Hotels sector declines by a considerable margin of 10 percentage points, and employers in both the Mining & Quarrying sector and the Transport, Storage & Communication sector each report decreases of 6 percentagepoints. Meanwhile, employers in the Construction sector report a 6 percentage point improvement.

And elsewhere, job seekers should see varying degrees of positive hiring activity across 31 of 42 countries and territories, with employers in 22 labour markets reporting improved or relatively stable hiring intentions compared to the third quarter. However, the pace of hiring is expected to weaken in 26 markets compared to one year ago.

Interestingly, in the emerging markets of China, Brazil and India, employers in nearly all industry sectors expect to slow the pace of hiring from this time last year—most notably in India.

And while in the world’s seven largest economies, hiring forecasts remain positive yet conservative in all countries except Italy where the Outlook declines further into negative territory. Expanding its European labour market research, ManpowerGroup polls the Finnish labour market for first time this quarter, where employers report a downbeat fourth-quarter forecast.

Jeffrey A. Joerres, Chairman and CEO of ManpowerGroup commented: “There is so much uncertainty in the global labour market now and that is undermining employer hiring confidence. If these uncertainties—the debt crisis in Europe, rumblings of a slowdown in China, the U.S. presidential election and healthcare costs coming in that can’t be calculated—keep stacking up, we will see the global labour market’s slow, steady hiring mode shift to a pause.”

“We’re seeing the beginning of that in the data for India with employers not shedding staff, but downshifting hiring considerably until they see more positive signals. In the U.S., employers remain confident enough to maintain the same steady hiring pace seen over the past year.”

ManpowerGroup’s global research indicates employers are most confident about adding employees the next three months in Taiwan, India, Panama, Brazil, Turkey and Peru, while those in Greece, Italy, Finland, Ireland, Spain, Slovakia, Netherlands, Czech Republic and Poland report the weakest and only negative hiring intentions worldwide.

This entry was posted in African News, South Africa News and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply