Economy strengthens but job losses continue | WPN World People News

THE QUARTERLY gross domestic product releases pointed to an economy that is recovering, on the other hand the Quarterly Labour Force Survey shows that jobs continue to be lost.

The results of the third quarter from this survey show that employment contracted by 0.7 percent or 86 000 jobs between the second and the third quarter of 2010. The unemployment rate in this period remained unchanged at 25.3 percent, but still 4.4 million people remain unemployed and the youth comprise 3.1 million (71 percent) of the total unemployed. The number of discouraged jobseekers went up by 4.9 percent or 95 000 people.

The job losses observed in the third quarter were mainly in the formal sector where employment contracted by 0.5 percent or 45 000 jobs. The contraction in employment in the formal sector was driven mainly by establishments that employ fewer than 50 people (see Table 1 above).

The contribution of these businesses to formal sector employment is 52.7 percent. On the other hand, establishments employing more than 50 people showed these were generating new jobs in the third quarter.

The industry that contributed the most to job losses in the formal sector was finance and other business services where employment contracted by 5.7 percent or 89 000 jobs.

On the other hand, job gains were observed in trade, where employment went up by 34 000 jobs (1.8 percent), construction up by 30 000 (4.1 percent) and manufacturing up by 22 000 or 1.5 percent (see Table 1 above). These gains were however offset by the losses in finance and other businesses resulting in the observed contraction in formal employment.

Employment in the informal sector contracted by 14 000 jobs between the second and the third quarter. However, the year-on-year picture shows the informal sector employment as having increased by 7 percent between the third quarter of 2009 and the third quarter of 2010 (see Table 2).

The results of the recently published Survey of Employers and the Self-employed that was conducted in the third quarter of 2009 (during the recession), showed that the number of individuals running businesses which are not registered for value-added tax declined from about 1.7 million in 2005 to approximately 1.1 million in 2009.

In 2009, the number of liquidations rose by 25.2 percent from 2008.

Source:Statistics South Africa