Tue. Feb 25th, 2020

Forecast for hiring intentions in Q1 2020 weakest in five years

Projections for growth in the South African job market in the first quarter of 2020 have hit a five-year low.

forecast for hiring intentions in q1 2020 weakest in five years - Forecast for hiring intentions in Q1 2020 weakest in five years

This is according to long-established global workforce solutions company ManpowerGroup SA’s latest employment outlook survey which forecasts a national payroll expansion of just 2%.

The research, was directed at gauging employers’ intentions of expanding their workforce in 2020, was carried out across a range of economic sectors, as well as large, small, medium and micro-businesses.

According to ManpowerGroup SA managing director Lyndy van den Barselaar, while “10% of employers forecast an increase in payrolls, 8% anticipate a decrease and 81% expect to make no changes. Once the data is adjusted to allow for seasonal variation, the outlook stands at +2%, and is the weakest reported in more than five years”. 

Van den Barselaar, who said prospects for employment growth were strongest in the Western Cape and weakest in the Eastern Cape, attributed the findings to the current challenging economic conditions in the country and policy uncertainty.

“As we move into 2020, the South African economy continues to be affected by subdued economic growth and a sluggish growth outlook. Policy uncertainty and a high unemployment rate remain a deep concern for local businesses who are looking to the new year with caution when it comes to their spending and hiring strategies.”

Key findings

  • Provincially, employers in the Western Cape report the strongest hiring intentions for the first quarter of 2020, while employers in the Eastern Cape report the weakest hiring intentions. In the Western Cape, the labour market is anticipated to record a positive net growth of 4%.
  • Conversely, the survey’s outlook for the Eastern Cape showed a negative net growth of -5%.
  • Limited job gains are also forecast in Gauteng and KwaZulu-Natal, with outlooks of +3% and +2%, respectively. The Free State outlook stands at -1%.
  • Opportunities for job seekers are expected to be strongest in the finance, insurance, real estate and business services sector and weakest within the construction sector. 
1649bafa jobmarket - Forecast for hiring intentions in Q1 2020 weakest in five years

Western Cape initiatives to boost development

“The Western Cape government continues to focus on development in the region through several initiatives, such as one initiative that is focusing on diversifying the province’s energy mix through an uptake in sustainable energy sources,” Van den Baselaar said. 

“This could create employment for those with skills in developing, installing and maintaining these sustainable energy sources such as solar photovoltaic panels, for example. 

“Another provincial initiative looks to encourage direct engagement between the government and the private sector, with sectors such as construction, manufacturing, IT, business process outsourcing and transport participating. These kinds of initiatives look to spur growth and promote job growth,” said Van den Barselaar. 

Eastern Cape employers report a considerable decline of 13 percentage points when compared with the previous quarter, and outlooks also weaken by five and three percentage points in Free State and KwaZulu-Natal, respectively. Elsewhere, hiring prospects remain relatively stable in Gauteng and Western Cape.

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