While South African employers are reporting limited hiring prospects for the third quarter, opportunities for local job seekers are expected to be strongest in the electricity, gas and water supply and the finance, insurance, real estate and business services sectors, ManpowerGroup South Africa’s Employment Outlook Survey (MEOS) shows.

“As water shortages continue to plague parts of the country, individuals and businesses are investing in systems and technologies that enable them to save water and lessen their environmental impact.

“This means that those individuals and organisations who are creating, installing and maintaining these kinds of systems and technologies are more than likely experiencing an increase in demand and, are, therefore looking to hire [more employees],” ManpowerGroup South Africa MD Lyndy van den Barselaar pointed out.

Meanwhile, the survey showed that hiring prospects would be weakest within traditionally strong employing sectors, including agriculture, hunting, forestry and fishing and the mining and quarrying sectors, with an improvement in weather conditions and stable commodity prices not translating into a favourable labour market environment.

Van den Barselaar added that hiring intentions would remain muted from July to September as both global and local economic uncertainty continues, with many businesses remaining cautious about increasing staffing levels.

“South Africa faced two economic downgrades in recent months, which further demonstrates market uncertainty, and which has resulted in businesses being more cautious in their spending and hiring activity. This is reflected in the fact that the majority of local employers said they anticipated no change in staffing levels for the upcoming quarter,” she noted.

Novare Investments analyst Dineo Kekana agrees, noting that the country continued to be plagued by policy uncertainty, deteriorating investor and business confidence and heightened political uncertainty.

She also pointed out that the economy would see the percentage of employers looking to increase employment decline from 12% in the previous quarter to 9% in the third quarter.

“The MEOS results correspond with the expected deterioration of South Africa’s economic and labour market landscape. The borrowing costs following the sovereign rating downgrades are expected to negatively impact small businesses,” she added.

Kekana said large employment increases were expected from large companies, while 2% of small companies reported expected declines. This indicates that large companies are in a better shape to absorb economic headwinds. 

REGIONAL COMPARISONS
Employers in all five regions covered by the survey anticipate an increase in staffing levels during the third quarter, with KwaZulu-Natal employers reporting the strongest hiring prospects of 7%.

The Western Cape and Gauteng are expecting increases of 6% and 5%, respectively, while employers in both the Eastern Cape and the Free State report cautious hiring intentions of 1%.

“KwaZulu-Natal remains a promising region for business development, with many local and international businesses looking to the region for expansion, especially those making use of its ports. A good example is Nestlé’s launch of its newly renovated coffee production facility in Estcourt, which has reportedly created 490 indirect and permanent jobs,” Van den Barselaar explained.

Kekana added that this would further be boosted by recreational activities, including tourism.

However, when compared with the previous quarter, hiring plans weaken in four of the five regions. The outlook for the Western Cape declines by seven percentage points, while employers in the Free State report a decrease of six percentage points. Outlooks are five and two percentage points weaker in the Eastern Cape and KwaZulu-Natal, respectively, but employers in Gauteng report relatively stable hiring prospects.

Year-on-year, outlooks also decline in four of the five regions. The most notable decrease of seven percentage points is reported in the Eastern Cape, while outlooks are five and four percentage points weaker in the Western Cape and the Free State, respectively. Meanwhile, employers in KwaZulu-Natal reported no change.