Price hikes anguish

INCREASES in the price of petrol and electricity means employers will be reluctant to hire new people.

The petrol price hike of 71c per litre inland and 66c a litre in coastal areas will be the biggest increase since July 2008. From today, petrol will cost R11.94 a litre inland and R11.59 at the coast.

Electricity tariffs increased by 16% on April 1. Last month, the National Energy Regulator of South Africa decided to reduce Eskom's average price increase to 16% for the period until March 31 next year. Eskom wanted to increase tariffs by 25.7%.

The University of the Witwatersrand School of Economic and Business Sciences says that the price increases will lead to businesses being less profitable and will either result in closures or the adoption of less energy intensive processes.

Professor Neil Rankin of the institution said while consumers must expect higher prices, what they should also expect is a decrease in job opportunities as price increases generally lead to lower economic growth.

Last month, the Manpower Employment Outlook Survey indicated that job-seekers will struggle to get jobs between April and June.

The report shows that 9% of employers are expecting to grow their staff levels, another 9% predict a decrease in employment while 81% are forecasting no change in staffing levels. People looking for jobs in KwaZulu-Natal and Eastern Cape will struggle as their employment outlook is weakest at 7% and 02%respectively.

According to the Adcorp Employment Index, in January 80,000 jobs were created. That figure shrank to 24,000 in February.

Andy Bryant of Chester Finance said: "South Africa has seen significant cost increases for the two primary sources of energy - electricity and fossil fuel. In addition, businesses are also facing the introduction of road tolls, which will all have serious implications for the running costs of businesses, and particularly smaller businesses."