ECONOMIC WEEK AHEAD: President’s forum carries hopes for a jobs solution
Cyril Ramaphosa’s jobs summit will dominate events this week, writes Sunita Menon
All eyes will be on President Cyril Ramaphosa’s jobs summit and whether stakeholders will be able to tackle SA’s jobless crisis.
The summit comes just two weeks after Ramaphosa announced an economic stimulus plan to kick-start growth in the economy.
"A great deal of hope is being placed on the upcoming jobs summit and the investment conference in October," said Nedbank chief economist Dennis Dykes.
As unemployment nears 30% and economic growth struggles to breach 2%, a lot is riding on the summit.
For the past two years more than one in four people in the workforce has been unemployed. "Overall, SA’s labour market has failed to gain any meaningful traction over the past few years with the unemployment rate, especially for the youth, remaining exceedingly high by global standards," said Stanlib chief economist Kevin Lings.
The National Economic Development and Labour Council (Nedlac) will convene the two-day summit on Thursday and Friday, bringing together government, labour, business and community, with a focus on collaborative and high-impact interventions to drive job creation, job retention and economic growth.
According to Nedlac, the summit will focus on aligning the efforts of every sector and every stakeholder "behind the imperative of job creation".
The Absa manufacturing Purchasing Managers Index (PMI), which will be released on Monday, will provide further detail on the performance of the manufacturing sector in the third quarter. The PMI gauges activity in the manufacturing sector and is usually a good indicator of where the production numbers will head in two months.
In August the PMI showed that activity in the manufacturing sector had dipped to the lowest level in just over a year, declining from 51.5 points in July to 43.4 in August. A figure below 50 indicates contraction in the sector.
After the shock plunge in August, FNB chief economist Mamello Matikinca expects a modest rebound.
"The sector still faces many headwinds, including an increased tax burden and higher fuel prices that keep a lid on already mediocre domestic demand, while ongoing policy uncertainties keep investment spending hostage," said NKC economist Elize Kruger.