South African employers are reporting subdued hiring plans for the second quarter of 2014 in the Manpower Employment Outlook Survey.

 

Nationally, employers expect only limited opportunities for job seekers this quarter as South Africa's seasonally adjusted Net Employment Outlook stands at 0%. The outlook is down 4 percentage points quarter-on-quarter and 2 percentage points year-on-year.

 

Lyndy van Barselaar, Managing Director of Manpower SA provides insights into why the South African employment market is expected to remain reserved, “While the country’s businesses environment is still in the process of recovering from the recession, economic growth has been slow paced. This has an enormous impact on employment. These factors, paired with the ever-rising fuel price, the added pressure of E-Tolls and the high cost of living, mean employers are cautious about expanding their businesses. This is evident in the results, as the Net Employment Outlook stands at 0%, forecasting a relatively flat labour market for the upcoming quarter.”

South African employment prospects expected to be strongest in the ELECTRICTY, GAS & WATER SUPPLY and MINING & QUARRYING sectors. Provincially, employers in the Western Cape report the strongest hiring intentions for the quarter.

 

South African employers are reporting mild hiring plans for the first quarter of 2014 in the Manpower Employment Outlook Survey.

 

Nationally, employers expect moderate opportunities for job seekers this quarter as South Africa's seasonally adjusted Net Employment Outlook stands at +4%. Despite the outlook staying relatively stable quarter-on-quarter, it is 5 percentage points stronger year-on-year.

 

Lyndy van Barselaar, Managing Director of Manpower SA provides insights into why the South African employment market remains reserved, “While rising activity levels in the mining & quarrying, agriculture and service sectors should assist in reaching the expected average annual growth rate, South Africa still faces several challenges. The country’s business interests continue to be negatively affected by global trading conditions, with adverse local factors aggravating its performance in recent times.

 

Recessionary conditions in South Africa’s main trading partner, the Eurozone, also have an effect on South African industries, especially in terms of exports and creating jobs in the private-sector.”

 

“Combined with subdued growth elsewhere in the world, such developments are impacting the prospects for job seekers in the New Year.”

 

Regional Comparisons

Employers in four of the five regions foresee payroll gains in the first quarter. A cautiously optimistic Net Employment Outlook of +7% is reported for the Eastern Cape, while the Western Cape reports an encouraging outlook of +10%. Modest hiring opportunities are expected in Gauteng and KwaZulu-Natal, where the outlook stands at +3%. The Free State expects stagnant hiring prospects, with an outlook of -2%.“A commitment from provincial governments in the country’s drive to overcome the shortage of suitable, skilled labour is a factor that continues to contribute to the expected positive hiring pace. Government is supporting skills development through giving incentives to companies that train certain employees through accredited training like CETA, for example,” says van den Barselaar.

 

Quarter-over-quarter, hiring plans weaken in four of the five regions. However, employers report improvements of 1 percentage point in the Western Cape.Hiring prospects improve in four of the five regions when compared with Q1 2013. The most noteworthy improvements of 9 percentage points are reported in the Western Cape and Eastern Cape. Employers in Gauteng report an Outlook increase of 4 percentage points and hiring plans are 1 percentage point stronger in KwaZulu-Natal. However, hiring intentions weaken by 3 percentage points in Free State.

Industry Forecasts

Employers in eight of the 10 industry sectors anticipate growing payrolls during the first quarter. The most positive hiring intentions are reported in the Electricity, Gas & Water Supply sector and the Mining & Quarrying sector, where Outlooks stand at 12% and 11%, respectively.

 

“With the Mining industry looking into new, specialised forms of mining such as fracking and off-shore mining, a demand is being created for those with specialised skills. Additionally, the Chamber of Mines plans to create 20 000 mining jobs by 2020, which continues to play a part in the anticipated growth of the Mining & Quarrying sector into the first quarter of 2014,” says van den Barselaar.

 

Quarter-over-quarter, hiring prospects strengthen in five of the 10 industry sectors. The Electricity, Gas & Water Supply, Mining & Quarrying and Wholesale & Retail Trade sectors all report slight increases in hiring intentions, while hiring intentions in the Construction, Public & Social and Transport, Storage & Communication sectors remain relatively stable.

 

“Employers in the Electricity, Gas & Water Supply sector report the strongest hiring intentions for Q1 of 2014. This is possibly owing to Government’s increased efforts to supply those in rural areas with basic housing, electricity and access to clean water. Additionally, the industry is also heading towards more sustainable use of energy and resources. This creates a demand for employment of those job seekers with skills in areas such as the implementation of renewable energy and that of new technologies in water reuse and recycling, for example,” says van den Barselaar.

 

Employers report stronger hiring intentions, compared to the same quarter in 2013, in eight of the 10 industry sectors. The strongest improvement is in the Restaurants & Hotels sector where the Outlook strengthens 11 percentage points. Meanwhile, the forecast in the Manufacturing sector improves 10 percentage points.A flat labour market is forecast for Q1 2014 in the Public & Social sector, where employers report a slight decrease in hiring intentions when compared with the previous quarter.

 

“It is important for government to continue upskilling and empowering the public sector, as well as to continue to provide support for small-, medium- and macro-enterprises. This will ensure that hiring prospects for the Public & Social sector will improve in 2014,” says van Barselaar.

 

The Agriculture, Hunting, Forestry & Fishing sector reports conservative employment opportunities in the first quarter of 2014. While the Outlook for the sector experienceda considerable decrease quarter-on-quarter, it remained relatively stable year-on-year.

 

“It is expected that the employment outlook for job seekers will remain relatively encouraging entering 2014, with positive hiring intentions reported in most sectors and regions. The South African GDP is expected to increase marginally to 2,8% in 2014, according to a report by Chief Economists at FNB,” concludes van den Barselaar.

Ten of SA’s top companies have unanimously claimed to be positive about the country’s business outlook for 2013 in a recent anonymous survey. But their optimism was tempered by the familiar concerns dogging local businesses.

I was recently following a conversation on LinkedIn about BEE and whether it has failed or succeeded and found it to be such an interesting conversation - more so because all of the participants of different gender, races and ages, were fundamentally agreeing with each other.

Unfortunately they were so quick to argue that they didn’t realise their agreement until much later on in the discussion, and their argument made me realise that South Africa as a nation seems to be doing exactly the same thing.

The issue of empowerment needs to be about increasing the number, value and size of opportunities in South Africa. The principles of BEE are about including all South Africans in the ability to access the economy. This means equal education, equal rights, and equal access to entrepreneurial, corporate or informal employment. Most importantly though, it means choices and economic freedom that is directly related to how hard you work and how committed you are.

All of this is achieved remarkably well in a growth economy, but less so in a struggling economy. South Africa is identified as an investment risk by so many countries in the world due to various factors, but mostly skills shortages, the perception of restrictive regulation and lack of clarity around the leadership of the country.

Many South African companies are downsizing or shutting their doors due to poor economic growth and decreasing profits. How does one focus on anything other than survival when the world faces recession? The recent mining strikes are a classic example of how the poor need more than the back-breaking challenges of employment opportunities just above the poverty line. However, to negotiate better working conditions for our poor we need to showcase South Africa as a politically stable, economically robust, attractive investment destination.

On the back of increased interest in investing in SA and a willingness to negotiate the terms of investment in order to access an attractive market, so too lies our ability to negotiate empowerment commitments, investment in skills development and training and increased social and developmental investment.

So many multinationals are competing with South African businesses globally, so many countries in the world are supporting their SMME markets to export globally as a means to reduce the impact of global recession. By contrast, in South Africa, we seem to be so internally focused on pointing fingers at our inadequacies and frantically trying to grab at the crumbs that are left of the economic pie that we have stopped trying to increase the size of the pie. We seem to have turned on each other when, in these economic times, we should be supporting each other as a united collective, to survive economic turmoil.

Where is the growth strategy? Where are the commercially-linked educational programmes? Where is the commitment to mentorship and skills development in critical skills shortage areas such as energy, renewables, nuclear, mining, construction, engineering and medicine? There needs to be a structured strategy, but the key issue of BEE is fundamentally one of economic and social transformation. Therefore, it should consider all South Africans.

How do we ensure that all South Africans participate in an environment of growth, stability and opportunity? How do we ensure that the majority of South Africans have access to the mainstream economy and all that comes with it? It requires collaboration. It requires us to seek solutions, to be proudly South African and part of rebuilding not only our reputation but our national pride.

Following a cautiously optimistic third-quarter recovery, South Africa’s hiring pace is expected to slow down noticeably in the last four months of the year, according to the 750 employers who participated in the just released Manpower Employment Outlook Survey. Once seasonal variations are removed from the data, South Africa’s Net Employment Outlook stands at a disappointing 0%, a 7 percentage point decline quarter-over-quarter and a 3 percentage point decline year-over-year. Opportunities for job seekers are expected to be generally weaker in most sectors and regions, especially in the Electricity, Gas & Water Supply and the Restaurants & Hotels industry sectors where the Outlooks drop to their weakest levels since the survey started in 2006.
“The results are somewhat downbeat; the encouraging nature of the 3rd quarter Outlook has given way to a relatively stagnant forecast once again. Lower interest rates have not had the desired effect on consumer spending and borrowing and consumer confidence remains low. This, in turn, has affected business confidence, which has dropped to a 12-year low and is affecting business employment plans. The on-going trend of indecision with regards to the Eurozone crises and fluctuating degrees of confidence and doubt, as well as key negative events--such as the recent Lonmin mine debacle--that alarmed foreign investment, continues to cause businesses to be cautious in their hiring plans,” says Lyndy Van Den Barselaar – Managing Director for Manpower Group South Africa.
“Businesses are expecting a sluggish holiday season and are not anticipating the boost that often bolsters sales at the end of the year. Additionally, other developing nations are outperforming South Africa as some political instability and indecision continues to concern business back home, especially with the upcoming elections next year. Fourth-quarter hiring intentions decline in nine of 10 industry sectors and in four of five regions in a quarter-over-quarter comparison. Opportunities for job seekers are strongest in the Free State where mining may contribute to the regions positive figures,” explains Van Den Barselaar.
Employers in three of the five regions surveyed expect to grow staffing levels during Quarter 4 2012. The most optimistic hiring plans are reported in Free State, with a Net Employment Outlook of +6%, and Gauteng employers anticipate some payroll gains with an Outlook of +3%. Meanwhile, employers in Kwazulu Natal forecast a struggling labour market with an Outlook of -6%, and report the weakest regional hiring plans for the third consecutive quarter.
Quarter-over-quarter, hiring prospects weaken in four of the five regions, according to employers. The Eastern Cape Outlook declines by 7 percentage points, and decreases of 4 percentage points are reported in both Gauteng and Western Cape. Elsewhere, Free State employers report a slight improvement of 2 percentage points.
Year-over-year, the Outlook weakens in four of the five regions. Kwazulu Natal employers report a decline of 6 percentage points, and the Outlooks for Western Cape and Eastern Cape decrease by 4 and 3 percentage points, respectively. Meanwhile, Free State employers report a 5 percentage point Outlook improvement.
 

* NEO – Net Employment Outlook
Region	2012 NEO* Q4	NEO QonQ	NEO YonY
EASTERN CAPE	+1%	-7	-3
FREE STATE	+6%	2	5
GAUTENG	+3%	-4	-2
KWAZULU NATAL	-6%	-2	-6
WESTERN CAPE	0%	-4	-4

For the second consecutive quarter, hiring intentions are strongest among employers in the Wholesale & Retail Trade industry sectors while employers in the Manufacturing industry sector report the least optimistic fourth-quarter hiring intentions. Outlooks in both the Electricity, Gas & Water Supply and the Restaurants & Hotels sectors are the least optimistic forecasts since the survey began in 4Q 2006.
“Despite low consumer confidence, many businesses still see opportunities for consumers to increase spending, especially in the essential categories, such as food and clothing. However, many consumers have cut back on luxury purchases such as eating out and going on holidays. Similarly, many businesses have cut back on travel budgets for employees, effecting accommodation expectations. Manufacturing has been affected by less consumer spending, as well as cheaper foreign imports in some sectors,” says Van Den Barselaar.
Employers in five of the 10 industry sectors expect to grow payrolls in the next three months. The most optimistic hiring plans are reported by employers in the Wholesale & Retail Trade sector, with a Net Employment Outlook of +5%, and in the Agriculture, Hunting, Forestry & Fishing sector, where the Outlook stands at +4%. Elsewhere, modest headcount gains are likely in both the Mining & Quarrying sector and the Public & Social sector, according to employers who report Outlooks of +3%. However, employers in four sectors predict negative headcount growth, most notably in the Manufacturing sector where the Outlook stands at -9%. Restaurants & Hotels sector employers also expect a sluggish hiring pace, reporting an Outlook of -4%.
Quarter-over-quarter, hiring intentions weaken in nine of the 10 industry sectors. The most noteworthy decline of 12 percentage points is reported in the Manufacturing sector. Outlooks decline by 7 percentage points in both the Construction sector and the Wholesale & Retail Trade sector. In the Transport, Storage & Communication sector, employers report a 6 percentage point decline quarter-over-quarter.
Year-over-year, employers report weaker hiring plans in eight of the 10 industry sectors. The Outlook for the Restaurants & Hotels sector declines by a considerable margin of 10 percentage points, and employers in both the Mining & Quarrying sector and the Transport, Storage & Communication sector each report decreases of 6 percentage points. Meanwhile, employers in the Construction sector report a 6 percentage point improvement.
 

* NEO – Net Employment Outlook
Industry	2012 NEO* Q4	NEO QonQ	NEO YonY
AGRICULTURE, HUNTING, FORESTRY & FISHING	+4%	-1	0
CONSTRUCTION	-1%	-7	6
ELECTRICITY, GAS & WATER SUPPLY	0%	-2	-3
FINANCE, INSURANCE, REAL ESTATE & BUSINESS SERVICES	+2%	-5	-3
MANUFACTURING	-9%	-12	-3
MINING & QUARRYING	+3%	-4	-6
PUBLIC & SOCIAL	+3%	0	-1
RESTAURANTS & HOTELS	-4%	-1	-10
TRANSPORT, STORAGE & COMMUNICATION	-1%	-6	-6
WHOLESALE & RETAIL TRADE	+5%	-7	-4

Job Prospects Mixed Globally

Elsewhere, job seekers should see varying degrees of positive hiring activity across 31 of 42 countries and territories, with employers in 22 labour markets reporting improved or relatively stable hiring intentions compared to the third quarter. However, the pace of hiring is expected to weaken in 26 markets compared to one year ago. Interestingly, in the emerging markets of China, Brazil and India, employers in nearly all industry sectors expect to slow the pace of hiring from this time last year—most notably in India. Meanwhile, in the world’s seven largest economies, hiring forecasts remain positive yet conservative in all countries except Italy where the Outlook declines further into negative territory. Expanding its European labour market research, ManpowerGroup polls the Finnish labour market for first time this quarter, where employers report a downbeat fourth-quarter forecast.
“There is so much uncertainty in the global labour market now and that is undermining employer hiring confidence. If these uncertainties—the debt crisis in Europe, rumblings of a slowdown in China, the U.S. presidential election and healthcare costs coming in that can’t be calculated—keep stacking up, we will see the global labour market’s slow, steady hiring mode shift to a pause,” said Jeffrey A. Joerres, Chairman and CEO of ManpowerGroup. “We’re seeing the beginning of that in the data for India with employers not shedding staff, but downshifting hiring considerably until they see more positive signals. In the U.S., employers remain confident enough to maintain the same steady hiring pace seen over the past year.”
ManpowerGroup’s global research indicates employers are most confident about adding employees the next three months in Taiwan, India, Panama, Brazil, Turkey and Peru, while those in Greece, Italy, Finland, Ireland, Spain, Slovakia, Netherlands, Czech Republic and Poland report the weakest and only negative hiring intentions worldwide.