South African employers are reporting encouraging signs for job seekers in the second quarter of 2018.
This is according to ManpowerGroup’s latest employment outlook survey, which found that 14% of employers expect to increase staffing levels over the next three months.
In compared only 5% who anticipate a decrease in employment, and 80% who forecast no change – resulting in a seasonally adjusted net employment outlook of +8%.
“While the economy is still weighed down by economic uncertainty, environmental factors such as the drought in the Cape and a fluctuating currency – business and consumer confidence seems to have improved,” said Lyndy van den Barselaar, MD of ManpowerGroup SA.
She noted that the consumer confidence index improved from -8 to -9 in the second quarter of 2017 and improving again in the fourth quarter.
“This has again improved surrounding the news of the election of Cyril Ramaphosa as South Africa’s president. While the country still faces challenges in terms of repairing years of economic stagnation, promises of ‘policy certainty and consistency’ from the government seem to have had a further positive effect on confidence and the strength of the economy thus far.
“These factors combined make for a more positive backdrop for employment in the country,” she said.
Staffing levels are expected to increase in all five regions during the second quarter of 2018.
Employers report the strongest hiring prospects in Western Cape with an outlook of +11%, and in Gauteng where the outlook is +10%. KwaZulu-Natal employers forecast moderate hiring activity with an outlook of +9%, and the outlook for Eastern Cape stands at +6%.
Meanwhile, the weakest hiring climate is anticipated in the Free State where the outlook is +1%.
When compared with Q1 2018, hiring prospects are 5 percentage points stronger in Gauteng, and improve by 2 percentage points in Kwazulu Natal. Elsewhere, employers report relatively stable hiring intentions in Eastern Cape, Free State and Western Cape.
Hiring plans weaken in Free State and Western Cape when compared with this time one year ago, with outlooks declining by 7 and 2 percentage points, respectively.
However, Gauteng employers report an improvement of 6 percentage points, while outlooks for Eastern Cape and Kwazulu Natal remain relatively stable.
“As the Western Cape province continues to struggle under a debilitating drought, businesses are making large investments into securing water supply,” said van den Barselaar.
“It was recently reported that many firms in the province have already invested heavily into grey water systems, rainwater harvesting, boreholes and equipment to reduce water use.
“This is more than likely leading to the planned uptake in hiring in the province, as employment opportunities are being created through the provision of goods and services for alternative water supplies and saving,” she said.
Payroll gains are anticipated in nine of the 10 industry sectors during the coming quarter.
The strongest labour market is forecast in the Finance, Insurance, Real Estate & Business Services sector, where the net employment outlook stands at +15%.
Elsewhere, a steady increase in staffing levels is expected by Restaurants & Hotels sector employers, with an outlook of +12%, and by employers in two sectors with outlooks of +11% – the Manufacturing sector and the Transport, Storage & Communication sector.
Public & Social sector employers report modest hiring plans with an outlook of +7%, while some payroll gains are forecast for the Mining & Quarrying sector, where the outlook stands at +6%.
Meanwhile, the outlook of -1% for the Electricity, Gas & Water sector reflects uncertain hiring prospects.
“As businesses in the country look to make smart decisions around their financial investments, take advantage of the economic improvements and invest wisely around environmental factors like the drought, the Finance, Insurance, Real Estate & Business Services sector is gaining momentum,” said van den Barselaar.
Hiring intentions improve in five of the 10 industry sectors when compared with the previous quarter. The most noteworthy increase of 15 percentage points is reported in the Manufacturing sector.
Finance, Insurance, Real Estate & Business Services sector employers report an increase of 4 percentage points, and the outlook for the Construction sector is 3 percentage points stronger. However, hiring plans weaken in five sectors, most notably by 9 percentage points in the Agriculture, Hunting, Forestry & Fishing sector.
When compared with the second quarter of 2017, hiring prospects also strengthen in five of the 10 industry sectors.
The Manufacturing sector outlook increases by a considerable margin of 10 percentage points, while the Outlook for the Finance, Insurance, Real Estate & Business Services sector is 6 percentage points stronger.
Increases of 5 percentage points are reported in two sectors – the Mining & Quarrying sector and the Restaurants & Hotels sector.
However, outlooks weaken in four sectors, including the Electricity, Gas & Water sector with a decline of 12 percentage points, and the Wholesale & Retail Trade sector, where employers report a decrease of 6 percentage points.