Picture: ISTOCK
Picture: ISTOCK

SA has added 235,000 employees to the economy in the last quarter of 2016, despite one of its key employers, the mining sector, continuing to bleed jobs.

Statistics SA said on Tuesday unemployment had dropped to 26.5% in the fourth quarter. The working-age labour force, those between 15 and 64 years old, is 36.9-million. Of these, 15.1-million are not economically active; the active labour force is 21.8-million. Just more than 16-million of the active labour force are employed and 5.8-million unemployed, Stats SA said.

Data provider Trading Economics had expected 27.3% jobless rate and the Bloomberg consensus was for 27%.

The jobs bloodbath the mining sector warned of in 2016 has continued unabated as the sector lost 17,000 more employees in the third and fourth quarters of 2016. More losses were expected, Statistics SA said.

Mining has shed 65,000 jobs since the last quarter of 2015, Stats SA’s Quarterly Labour Force Survey showed.

Roger Baxter, Chamber of Mines CEO, said from 2014 to the first half of 2016 the industry had seen a net loss of R50bn. "Policy uncertainty including the nonfinalisation of the Mineral and Petroleum Resources Development Act, and uncertainty relating to the mining charter have served to detract investment in the sector," Baxter said. Input costs such as electricity, labour and steel had risen sharply against declining productivity and safety stoppages.

From 2012 to 2016 the sector had lost about 60,000 jobs as it struggled to remain viable. "This despite the industry agreeing to and participating in discussion relating to the 10-point jobs declaration. It is unfortunate that the industry received little support from other stakeholders during the period and was left to battle [a] crisis and to try and remain viable," Baxter said.

Mining’s 8% contribution to GDP is overshadowed by that of the services industry, which contributes 23%. But mining is historically one of the largest employers.

Pali Lehohla, Statistics SA CEO, said the employment data clearly indicated a shift towards "capital deepening", especially in the primary sector where mining companies were leaning towards capital-intensive methods that replaced labour.

"We are seeing capital deepening in manufacturing and mining and certainly in agriculture. The fourth revolution is here and it’s going to send many people to the wall. It gets worse when they don’t have skills."

The labour force survey measures the dynamics of employment and unemployment and includes the formal and informal sector and small-scale subsistence farmers.

Eight of the 10 industries reported employment improvement, mainly driven by the services, transport and manufacturing industry that created 44,000 jobs during the quarter.

The construction industry shed 9,000 employees.

On a net basis only 51,000 jobs were created in 2016 while the number of unemployed increased by 588,000.

Kevin Lings, Stanlib chief economist, said the labour market "failed to gain any meaningful traction" in 2016 despite swings in the quarterly data and unemployment rate that was high against global standards. It reflected a "lack of fixed investment spending by the private sector, as well as the sustained low business confidence".

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