Almost half of 1m jobs lost recovered

Pretoria - Only 448 000 jobs have been regained from the 1 million jobs lost between the fourth quarter of 2008 and the third quarter of 2010‚ the Reserve Bank's annual economic report released on Monday revealed.

It referred to SA's employment recovery as "hesitant"‚ and highlighted in particular the job losses within the country's key sectors of mining and manufacturing which together account for a large number of formal sector jobs.

Employment growth in the mining sector decelerated notably from a year-on-year rate of 4.2% in the second quarter of last year‚ to 2.0% in the year to the first quarter of this year‚ the annual report said.

Lower commodity prices‚ widespread industrial action and safety-related work stoppages since the middle of last year have plagued the sector.

Uncertainty surrounding the mine nationalisation debate also negatively affected the sector‚ according to the Reserve Bank's report.

"However‚ the uncertainty has subsided somewhat‚ as government indicated that instead of mining nationalisation‚ changes to mining taxation would be considered‚" the bank said.

Growth in South Africa’s economy remains "pedestrian", with the manufacturing sector vulnerable to weak global growth because of its impact on exports, the report said.

While inflation has moderated, food prices are likely to stay elevated for the rest of the year due to higher transport, electricity and refrigeration costs and wage increases, the bank said in its 2012 annual economic report.

The report reviews economic development over the last 18 months and comes four days after the bank unexpectedly cut its benchmark interest rate to 5.0% and lowered its 2012 growth forecast to 2.7% from 2.9%.

“The manufacturing sector remains susceptible to renewed weakness in the global economy, particularly in the euro area, through possible declines in exports,” the bank said.

Manufacturing accounts for about 15% of Africa’s largest economy.

The central bank also blamed subdued domestic growth on infrastructure bottlenecks.

South Africa’s inclusion from October in Citigroup’s World Government Bond Index should give it a larger and more diversified investor base which could raise capital inflows and support the raising for funds for infrastructure, it added.

Public sector employment is reported to have risen in recent years as government tried to mitigate job losses in other sectors.

According to the annual report‚ public sector employment growth accelerated to 4.6% last year‚ the highest rate of growth since 1975.