Formal employment up, factories shed jobs

Johannesburg - Employment in South Africa's formal sector edged up 0.1% in the first quarter of 2012 compared with the previous quarter, with job increases in the mining sector and a fall in manufacturing, Statistics South Africa said on Tuesday.

Africa's biggest economy is struggling to create jobs and reduce unemployment, which was 25.2% of the labour force in the first quarter.

Employment in the formal non-agricultural sector increased by about 5 000 to 8.384 million between December 2011 and March 2012, Stats SA said. Jobs were up 1.1% on a year-on-year (y/y) basis.

The mining and quarrying industry reported a quarterly increase of 0.8%t and an annual increase of 2.2%.

But jobs in manufacturing, which accounts for about 15% of gross domestic product, fell by 0.1% in Q1 compared with the previous three months and were down 0.3% y/y.

Turmoil in Europe, the main export market for manufactured goods, has hurt the sector.

South Africa lost a million jobs during a recession in 2009 and economic growth, seen at 2.7% this year, remains far below the 7% the government says is needed to significantly slash the unemployment rate.

South Africa's labour force is far more expensive, yet less productive, than workers in emerging market rivals.

A close alliance between the ruling African National Congress and unions has led to a raft of labour-friendly legislation that economists say is eroding the country's competitiveness.