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Weak rand curbs SA employers from hiring

| Economic factors

South African employers have reported conservative hiring plans for the April to June time frame, according to the latest Manpower Employment Outlook Survey released.

The survey found that 13% of employers forecast an increase in staffing levels, 8% expect a decrease and 77% anticipate no change. Once the data is adjusted to allow for seasonal variation, the outlook stands at +5%. Hiring prospects are unchanged when compared to the first quarter of 2016, but declined by 6 percentage points year-on-year.

Lyndy van den Barselaar, managing director of Manpower SA, said the weak global position of the rand has had a negative impact on many SA businesses, across sectors. Increased operating and import costs, paired with the rising costs of necessities and the falling price of commodities, mean that many businesses do not have the budget to hire new talent in the coming quarter. This trend is seen globally for the second quarter of 2016.

Regional comparisons

Staffing levels are forecast to grow in all five regions during the second quarter of 2016. Employers in KwaZulu-Natal report the strongest hiring prospects with a net employment outlook of +9%. Some payroll gains are anticipated in both Eastern Cape and Gauteng, where outlooks stand at +6% and +5%, respectively. Western Cape employers expect a modest hiring pace, reporting an outlook of +4%, while the outlook for Free State stands at +1%.

When compared with the previous quarter, employers report weaker hiring prospects in three of the five regions, with the most noteworthy declines of 4 and 2 percentage points reported for the Free State and Gauteng, respectively. Meanwhile, the outlook for the Eastern Cape strengthened by 6 percentage points.

Year-on-year, hiring plans weakened in all five regions. A considerable decline of 9 percentage points is reported in Western Cape, while outlooks are 6 and 4 percentage points weaker in Gauteng and Kwazulu-Natal, respectively. In both the Eastern Cape and the Free State, employers report decreases of 3 percentage points.

Sector comparisons

Workforce gains are anticipated in 8 of the 10 industry sectors during the next three months. The strongest labour market is expected in the electricity, gas and water supply sector.

Employers report cautiously optimistic hiring plans in the finance, insurance, real estate and business services sector and the restaurants and hotels sector.

Some hiring opportunities are also forecast in the construction sector and in the mining and quarrying sector. Flat labour markets are expected in both the agriculture, hunting, forestry and fishing sector and the wholesale and retail trade sector.

“The continuously rising cost of doing business and living, paired with the falling rand and commodity prices mean that more businesses and individuals are seeking the assistance and advice of those businesses operating in the finance, insurance, real estate and business services sector,” explained Van den Barselaar.

When compared with the previous quarter, hiring intentions weakened in 6 of the 10 industry sectors. The agriculture, hunting, forestry and fishing sector employers report the most noteworthy decline of 8 percentage points, while outlooks are 6 and 5 percentage points weaker in the transport, storage and communication sector and the public and social sector, respectively.

However, there was a considerable increase of 17 percentage points reported by construction sector employers, while the outlook for the mining and quarrying sector is 10 percentage points stronger.

Year-over-year, outlooks also declined in 6 of the 10 industry sectors. The most notable declines of 17 and 14 percentage points are reported by employers in the agriculture, hunting, forestry and fishing sector and the transport, storage and communication sector, respectively.

Considerably weaker hiring prospects are also reported by employers in the manufacturing sector, with a decline of 13 percentage points, and in the wholesale and retail trade sector, where the outlook is 11 percentage points weaker. A considerable improvement of 12 percentage points is reported for the mining and quarrying sector while the restaurants and hotels sector outlook is 5 percentage points stronger.

“As SA’s mining and quarrying sector continues to focus on more sustainable and responsible methods, this creates opportunities for new employment within the sector, especially for those consultants who specialise in sustainability and environmental conservation,” said Van den Barselaar.

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