SANCHIA TEMKIN

Professional Services Editor
EMPLOYMENT growth in SA is steadily declining but the country remains better off than many others, accounting firm Grant Thornton said yesterday.

Its employment growth index measures increases and decreases in employment, and the latest survey showed employment growth of 4% last year in SA’s private sector.
This compared to a 6% increase in employment in 2007.
SA was unlikely to see any significant growth in employment next year, but 91% of private sector businesses surveyed said they intended to increase salaries in line with inflation or above, compared to the global average of 64%. Only 7% of South African businesses expect to reduce pay or to offer no increases over the next 12 months.
Globally, employees at nearly a quarter of businesses surveyed could be worse off in the year ahead, Grant Thornton said.
“There are clear signs of a slowdown in our economy,” said Leonard Brehm, national chairman of Grant Thornton.
Brehm said that the retail and manufacturing sectors fared the worst.
“The construction and services sectors are the sectors in which job growth has taken place in SA in the past year.
“Unfortunately employment growth in these sectors is not big enough to make a dent in our unemployment numbers,” he said.
“We are unlikely to see any significant growth in employment next year either.”
The study, which was carried out between September and November last year, was conducted among more than 7000 medium-sized to large privately held businesses in 36 countries.
In SA, 23% of the retail industry and 22% of the manufacturing sector decreased employee numbers in the past year.
Employment increased in only 25% of the retail sector and 13% of the manufacturing industry, compared to 37% for the construction and 40% for the services sectors.
Brehm said SA’s skills shortage meant that employers offered good incentives to retain staff in contrast to markets where labour was plentiful and there was a fall in demand.
The research findings showed that globally 21% of businesses planned to offer no pay increases this year while 3% expected to reduce salaries.
The gloomiest salary predictions came from the Asia Pacific region, where 29% of businesses would offer no pay rise this year.
Nazmeera Moola, head of macro strategy at Macquarie First South, said: “At first glance the employment growth index was surprisingly high.
“However, I suspect that if this survey was redone today, we would find virtually no countries expecting job growth in the next 12 months.”
Moola said what was more worrying was that the vast majority of South African companies still expected to provide inflation-linked wage increases this year.
“This was in sharp contrast to most of east Asia, where companies expect to cut wages. As a result, companies will control costs by cutting jobs.”

http://www.businessday.co.za/

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