AEI September 2011 

Salient Features

•  Employment declined at an annual rate of 2.1% during August, the fourth consecutive monthly decline. At an annual rate this represents a loss of 49,306 workers during the month.
• Employment declined most sharply in the manufacturing (19.9%), mining (19.3%) and construction (16.0%) sectors, despite sharply rising export prices for commodities and basic beneficiated manufactured products. In line with the declines in the manufacturing and mining sectors, employment of machine operators declined by 5.95% and of technical professionals by 3.8%.
• Employment by government continued to rise (6.2%), with the public sector now accounting for all the job creation in the economy for 2011 as a whole.
• The unofficial sector continued to create jobs, employing 16,917 additional people in August, contributing to the so-called “informalization” of the South African workforce.
• This month we take a closer look at temporary work, for the reason that temporary work bears a close relationship to the economy’s underlying health and may be considered a leading indicator of permanent employment conditions. Permanent jobs, which are beset by legal and regulatory problems as our previous analysis has shown, are an unreliable indicator of business activity. In August the capacity utilization of temp staff (i.e. the number of hours actually worked in relation to the available hours per temp) dropped to 74.6% – a decline of 8.1% at an annual rate, the worst decline in 4 months. Compared to a year ago, the number of temps increased by 4.5% in August but their average monthly working hours declined by 20.6%. Overall, capacity utilization of temps dropped by 9.0% in August compared to a year ago and by 24.1% compared to the peak in April this year. This suggests that employment conditions remain exceedingly weak and continues to suggest that the prospect of an improvement in permanent jobs, which tend to lag behind temp jobs, is a long way off.

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