Thursday, January 05, 2017

South African Labor Market Under Scrutiny
January 5, 2017

South Africa’s labour market is again under scrutiny in the face of more than 8 million unemployed and more than 500 000 matriculants search for their space in the market.

The country’s unemployment rate hit new records in the third quarter of last year, clocking at 27 percent, a 13-year high.

South Africa has one of the highest unemployment rates in the world. But despite all these hurdles, the grass looks greener on the other side, given that the country’s electricity supply is safe and sectors such as manufacturing, electricity, gas and water supply promise to create a number of jobs in the next three months of this year.

The recent agreement by ArcelorMittal South Africa with the Evraz Highveld Steel plant outside Wibank is likely to result in massive job creation.

The deal allows Highveld Steel to produce heavy structural steel and it will be the only plant on the African continent that is capable of producing structural steel of this nature. Industry analysts also said that the deal will see the steel industry in South Africa is likely to rebound and that there is no doubt that this will lead to job creation and competitiveness in the industry, a move that will pick up the local economy a little bit this year.

With more power now available for heavy industry sector, the domestic economy is likely to improve for the better.

The manufacturing sector is expected to thrive this year, on the back of more stable and reliable electricity after the Medupi and Kusile power stations started to supply power to the national grid before Christmas. In total, 1 591MW has been added to the national electricity grid.

Significant strides were made to support the country’s manufacturing, with a total of R57 billion of investment made during the 2015-16 financial year by the Department of Trade and Industry through its range of incentives to support the sector.

The latest Manpower Employment Outlook Survey for the first quarter of this year, revealed that the South African employers are cautiously optimistic for hiring intentions for the next three months. Opportunities for job seekers are expected to be strongest in the electricity, gas and water supply sector and manufacturing.

Provincially, employers in the Western Cape report the strongest hiring intentions for the first quarter of the year, with little expected within Gauteng and KwaZulu Natal.

President Jacob Zuma also reiterated in his New Year message that jobs and improving the economy will be key for this year.

“The South African economy remained resilient and continues to be an attractive investment destination that is open for business, despite the difficult economic climate domestically and globally,” Zuma said.

“Progress was made in the implementation of the Nine Point Plan (NPP), which is an action plan to deliver on the socio-economic goals stated in the National Development Plan (NDP), especially to achieve a higher level of inclusive growth,” Zuma said.

Some analysts said it is too early to draw a conclusion regarding job prospects for this year, especially taking into account that South Africa’s economy grew at a slower pace than expected in the third quarter of last year by 0,2 percent — after 3,5 percent growth in the second quarter, but there is some hope that the economy might rebound this year.

Other observers argued that it will not be easy for matriculants entering the job market this year and they will not be easily absorbed by the market given that most available positions need experience and skills.

— The New Age.

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