Employment outlook still weak

Johannesburg - The overall environment for employment in South Africa has become much more negative and will remain so until 2010, according to the latest Adcorp Employment Index released on Wednesday.

The index showed a quarter-on-quarter decline of 12.9%.

The environment was influenced by the substantial decline in macro- economic activity (17.1%) and demand for labour, down by 5.7%.

However, according to the index, construction, logistics and warehousing, communications and information technology; government and personal services sectors remained robust and were showing net employment growth.

"The sectors that are under substantial strain and show employment losses are mining, manufacturing, retail and wholesale trade as well as finance, real estate and business services," said Adcorp Holdings chief executive Richard Pike.

He pointed out that there were however certain skills that remained in high demand, particularly in the financial services; engineering; natural and physical sciences; medical and health; education as well as information and communication technology sectors.

Due to the economic environment, supply of skills was again marginally up by 0.5% and for the second consecutive quarter exceeded demand for skills in the country.

This trend is expected to continue until the second or third quarter of 2010.

Notwithstanding the labour movement's pressure on employers for higher wages, the remuneration index was also down by 5.6% and was reflective of the pressures on the South African economy translating into pressure on remuneration trends.

According to the index, salary increases were currently tracking at between 8% and 9%, but were expected to decline to between the 6% to 8% levels by the end of 2009 in line with CPIX.

Pike added that although the Adcorp Employment Index was showing a sharp decline and trending downward, it was not in major negative territory yet. "It is currently at the same levels as the 1st quarter of 2005.

"Although the overall supply of skills exceeds demand, shortages still exist in those sectors that are especially linked to our country's major infrastructure development projects, government, personal services, and information and communications sectors," said Pike.

- I-Net Bridge