Employee confidence falls: Solidarity

Johannesburg - Employee confidence fell in the first quarter of 2014 to 45.7 points from 46.5 points in the last quarter of 2013, according to the latest Solidarity-ETM Labour Market Index (LMI) released on Thursday.

The LMI measures labour affordability and business cycle movements in addition to employee confidence, Solidarity senior economics researcher Piet le Roux said in a statement.

The index overall improved slightly to 45.5 points in the first quarter of this year from 44.9 points in the forth quarter of last year.

Worsening trend

A value of 50 points was the threshold level between rising and falling wage and job security.

Le Roux said the decline in employee confidence indicated employees experiencing a tough labour market.

"The sustained score below 50 for each of the index’s separate components, as well as the index as a whole, means that job security in South Africa is exhibiting a worsening trend," he said.

"The index has been below 50 for a prolonged period. In the first quarter of 2013, for example, the index was just 46.1 and has been below 50 in all quarters except the second quarter of 2011."

Business conditions

Earlier a FNB/BER building confidence index showed that building confidence in SA declined in the second quarter of 2014, largely due to weaker domestic demand.

After breaching the key 50-index point mark in the first quarter of 2014 the index fell by 11 points to 41 in the second quarter.

The current level indicates that about 60% of respondents are dissatisfied with prevailing business conditions.

“The 11 point drop in overall building confidence was largely due to a sharp fall in the confidence of building material manufacturers” said John Loos, property economist at FNB.