Trade and Transport Sectors Help Stem Job Losses as South Africa’s Formal Employment Declines Slightly

South Africa’s formal job market showed a slight improvement in the last quarter of 2023, with key sectors like trade, transport, and electricity helping to offset losses in manufacturing and mining. According to the latest data from Statistics South Africa (Stats SA), formal employment declined by just 0.1% quarter-on-quarter (QoQ) between October and December 2023—a notable slowdown compared to the 1.2% drop seen in the previous quarter.

However, the year-on-year (YoY) figures paint a more concerning picture, with a 0.8% decline in formal jobs. Full-time employment dipped by 0.1% QoQ and 0.3% YoY, while part-time work saw gains, particularly in trade, construction, and business services.

Sector-Specific Trends: Gains and Losses

The trade, transport, and electricity sectors were among the few bright spots, helping to stabilize employment numbers. Meanwhile, community services, manufacturing, construction, and mining continued to shed jobs.

Dr. Azar Jammine, chief economist at Econometrix, attributes the decline in community services to government austerity measures, as public sector wage bills are scaled back amid rising national debt. South Africa’s debt-to-GDP ratio stood at 72.2%, with projections suggesting it could reach 75.3% in 2023, according to IMF data.

Earnings Growth Outpaces Inflation—But Challenges Remain

Despite job losses, gross earnings rose by R35.5 billion (3.6%) YoY, slightly above the current inflation rate of 3.2%. However, inflation peaked at 5.6% in February 2023, meaning real wage growth has been uneven.

While the latest figures suggest some resilience in certain sectors, South Africa’s labor market remains under pressure. The ongoing struggles in mining and manufacturing, coupled with government budget constraints, could continue to weigh on employment growth in 2024.

For now, the trade and transport sectors are providing much-needed stability, but broader economic reforms may be needed to reverse the longer-term decline in formal jobs.

{Source IOL}

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