Construction, manufacturing sectors take biggest job-losses hit

Labour and mining analyst Mamokgethi Molopyane said she expected the unemployment figures released by Stats SA to be higher because of the stagnant nature of our economy.

“It’s not surprising because the economy is stagnant. When you look at certain sectors like construction and manufacturing, which have historically employed large numbers, I would have expected the numbers to be higher – between 35,000 and 40,000 – but 28,000 jobs lost is still a high number considering our unemployment crisis,” said Molopyane.

She said the manufacturing sector, which was badly affected, depended on global demand so it was inevitable it would be disrupted.

Molopyane said uncertainty in policy-making could have also been a factor because the business sector was unclear about government’s regulations.

“One of the arguments put forward by the business sector in industries like mining, for example, is the regulatory environment which they feel is stifling. This creates an environment of uncertainty and that is preventing them from creating jobs,” she said.

The Steel and Engineering Industries Federation of Southern Africa (Seifsa) said in a statement the growing number of job losses in the manufacturing sector during the third quarter of 2019 was extremely worrisome.

According to Seifsa economist Marique Kruger, the job numbers in both the construction and community services sectors were also negative, with the sectors recording losses of 12,000 and 11,000 jobs, respectively.

“Given that the recently-published real GDP figure for the third quarter of 2019 confirmed a stagnant demand environment, the decrease in employment for the same period correlates with structural challenges faced by South Africa’s industrial production,” said Kruger.

She added that the further decline in employment numbers reaffirmed the ill health of the country’s economy despite efforts to rejuvenate industrial activities towards more employment and economic growth.

“If growth continues to be subdued, likewise business and investor confidence will continue to decline, thus constricting economic activities and job creation,” she said.

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