Picture: THE TIMES
Picture: THE TIMES

The significant decline in the number of employed South Africans is set to influence proceedings at next week’s jobs summit significantly.

The number of employed South Africans fell by 69,000 in the second quarter, driven largely by a huge fall in the community services sector, data from the Quarterly Employment Survey released by Stats SA on Wednesday showed. The mining and manufacturing sectors also bled jobs, the report read.

Jobs losses were prompted by the weak growth environment and structural constraints in the economy, said FNB chief economist Mamello Matikinca.

The data from the employment survey is separate from the Quarterly Labour Force Survey. The labour force survey gives SA’s official unemployment rate, while the employment survey gives a snapshot of total employment in the non-agricultural formal sector.

President Cyril Ramaphosa has called for a jobs summit that will look at what is needed to grow the economy and make it more productive. It is also meant to ensure greater investment.

Announcing his economic stimulus plan last week, Ramaphosa said there will be a reprioritisation of spending towards investments in agriculture and rural economies, which analysts say could reduce unemployment. The economy has been struggling to breach the 2% growth mark since 2013 while unemployment has edged closer to 30%.

Due to weak activity in the primary sectors, SA has entered a recession for the first time since the global financial crisis.

"Overall, labour market dynamics remain weak. Subdued economic activity, with GDP growth expected to be barely positive this year [2018], coupled with depressed business confidence continue to constrain private-sector employment growth," Investec economist Lara Hodes said.

Employment approach

Many summits about creating jobs have failed so far, said Centre for Development and Enterprise executive director Ann Bernstein. "SA’s approach to employment has failed because too many of the country’s policies raise the cost of doing business and reduce the economic growth rate," she said.

Finance minister Nhlanhla Nene warned earlier in September that in order to make a dent in the unemployment rate, growth in SA should reach 5%.

While business is confident that the jobs summit will be a positive step, labour movements have been wary.

"Both [the] government and business are showing disdain in discussing far-reaching macro-economic, industrial, trade and social policies that can take the country away from the current crisis we are confronted with," National Education, Health and Allied Workers Union general secretary Zola Saphetha said.