Employment stats remain a concern

THE Quarterly Employment Statistics (QES) for the second quarter of 2017 were recently released by Stats SA.

The report highlighted that the formal non-agricultural sector of the economy showed a decline of 34 000 jobs by end of June 2017, with the previous quarter recording a loss of 41 000 jobs.

Speaking to the ZO, Dr Irrshad Kaseeram, Deputy Dean (Research and Internationalisation) in the Faculty of Commerce Administration and Law at the University of Zululand, said this is indeed dismal news for all concerned.

‘The statistics on unemployment must be seen against the backdrop of a shrinking economy where the economy moved into recession with a decrease of 0,3% in GDP during the last quarter of 2016, followed by a 0,7% contraction in the first quarter of 2017.

‘Compared to last year June only the mining (2%), manufacturing (0.2%) and trade (2.3%) sectors grew – percentage growth in brackets.

‘While, rest of the sectors all suffered losses: electricity (-1.6%), construction (-1.5%), transport (-2.4%), business services (-0.1%) and community services (-0.8%)

‘The rise in mining is driven by positive outlook for Chinese growth while the trade growth is probably seasonal due to retail activities picking up as we approach the December holidays.

‘Manufacturing growth is too low to make any meaningful pronouncements,’ said Kaseeram.

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Concerning factors

Kaseeram noted that while unemployment remains a major social challenge in SA, with youth unemployment among the highest in the world, it is the unstable political landscape which needs to be addressed.

‘Government continues to face challenges to effectively deliver basic economic and social services in rural areas and the townships.

‘This is likely to worsen given dismal economic growth prospects which will imply less tax revenue for government to fulfil its goals.

‘If this negative outlook persists, addressing absolute poverty, as government has done since 1994 through extensive social grants, will become a serious challenge.

‘South Africa’s industrialisation and employment-generation strategy to encourage entrepreneurship will have limited success due to lack of access to finance, inadequate technical and business management skills; inadequate mentoring of entrepreneurs; and business entry barriers due to a few big players dominating the economy,

‘Business confidence it at its lowest, last seen during the apartheid era.

‘In order for all sectors to grow at a desirable rate that will solve the unemployment and growth challenges, the private sector needs to invest in the economy.

‘Political risks and a mismanaged economy resulted in private investment declining persistently over the past six years,’

‘This trend is likely to remain unless we see political change; it is only pragmatic strategies involving government working with the private sector, labour and civil society through a social compact, to promote inclusive growth and economic transformation that a turnaround is possible,’ Kaseeram said.

 

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  AUTHOR
Orrin Singh

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