Picture: 123RF/SERGEY NIVENS
Picture: 123RF/SERGEY NIVENS

Non-agricultural employment in SA improved by 0.8% year-on-year in the first quarter, with employers adding 76,000 staff to their payrolls, notably those in the retail trade and business services sectors.

Part-time employment, however, dropped 4.9% in the first quarter year-on-year, data from Stats SA’s quarterly employment survey showed on Tuesday. Gross earnings fell 5.9% quarter-on-quarter, as employers continued to slash bonuses and overtime for their staff.

Formal-sector employment rose 1.4% to end-March 2019 compared with the same period in 2018, while overall employment grew 0.2% quarter on quarter. The Bloomberg consensus had been for employment to rise 0.2% quarter-on-quarter, and 0.5% year-on-year.

Employers in the trade sector, which includes retailers, added 67,000 jobs, a 3.1% growth year-on-year, while the manufacturing sector added 9,000 jobs, growth of 0.7%.

Overall, domestic labour market conditions continue to remain sluggish, with weak economic growth prospects weighing on consumer and business confidence, said Investec economist Lara Hodes, adding that this is detracting from critical fixed investment in the economy.

The construction sector led the losses, with employment falling by 23,000 year-on-year, or 3.6%. This was followed by the electricity sector, which shed 2,000 jobs, a 3.2% decline.

Average monthly earnings grew 3.8% year-on-year, but fell 1.9% quarter-on-quarter. On an annualised basis, employers paid 13.8% less in bonuses and overtime.

SA’s economy contracted by a shock 3.2% in the first quarter of the year compared with the last quarter of 2018, and economists had expected the employment data to reflect this.

A boost for the community services sector, which rose 19,000 year-on-year, was likely due to the national elections, said FNB economist Siphamandla Mkhwanazi, while increases in the mining and manufacturing sector were surprising.

The 3.8% year-on-year increase in payments was lower than the 4.1% rise in consumer inflation during the period, suggesting real wages declined in February, Mkhwanazi said, adding that this was concerning in light of the additional tax burden on consumers this year.  “Indeed, we expect the pressure on households’ disposable income to persist, which bodes ill for our outlook for overall household consumption over the near to medium term.”

The employment rate also improved in the fourth quarter of 2018, given a seasonal boost by the holiday season.

SA’s quarterly employment survey — also known as non-farm payrolls — excludes the agricultural sector.

Update: June 25 2019 
This story has been updated with comments throughout.

gernetzkyk@businesslive.co.za