Employee confidence during the first quarter of the year dipped to its lowest levels since the second quarter of 2013, the latest South African Labour Market Report by trade union Solidarity and market strategist ETM Analytics has revealed.

While the overall Labour Market Index (LMI) showed a slight uptick during the first quarter of 2014, employee confidence fell to 45.7 index points from 46.5, reported in the last quarter of 2013.

During the quarter under review, 58% of those surveyed reported moderate to high job security, while 12% said they felt their jobs were more secure than in the previous quarter, compared with 58% and 16% respectively in the fourth quarter of 2013.

“The decline in the employee confidence component points to employees’ experience of a tough labour market,” Solidarity senior economics researcher Piet le Roux said.

The overall LMI, including measures of employee confidence, labour affordability and business cycle movements, showed a marginal improvement from 44.9 index points in the fourth quarter of 2013 to 45.5 index points in the first three months of 2014.

Labour affordability remained steady at 45.7 index points, indicating that the scope for hiring new staff and wage increases relative to economic output remained weak.

The ETM business-cycle index recovered marginally to 45 index points in the quarter under review from 42.4 in the preceding quarter, but remained depressed on the back of a downturn in South Africa’s economy.

“The business-cycle index indicates business expansion plans are limited by difficult business conditions in both supply chains and final product demand,” Solidarity said.

The LMI index had shown minimal rising impetus in the past few quarters, remaining below the 50 index-point mark in all quarters except the second quarter of 2011, revealing long-term difficulties in the labour market and a prolonged period of job and wage insecurity, stagnant to rising wages and retrenchments in some sectors.

“The sustained score below 50 for each of the index’s separate components, as well as the index as a whole, means that job security in South Africa is exhibiting a worsening trend,” Le Roux concluded.