Job creation in South Africa is showing signs of slowing

This year is the fourth consecutive year that South Africa has grown its formal-sector non- farming employment, but job creation is starting to slow down, according to the latest Employment Report released yesterday.

This year is the fourth consecutive year that South Africa has grown its formal-sector non- farming employment, but job creation is starting to slow down, according to the latest Employment Report released yesterday.

The report, commissioned by trade union Uasa and compiled by T-Sec economist Mike Schussler, cited the higher interest rate environment and slower economic growth as the main reasons for the slow down in job creation. It added that growth in self-employment remained intact as more people were forced to rely on themselves to generate income.

"The Companies and Intellectual Property Registration Office database indicates that more than 240000 new firms were registered during the first six months of 2006.

"While not all are actual firms, other figures indicate that many people are creating jobs for themselves," the report noted.

It estimated that about one in six South Africans had created their own employment.

South Africa's unemployment rate is hovering around 26 percent - a figure considered one of the highest in the world.

The government's latest economic blueprint - the accelerated shared growth initiative of South Africa - aims to step up the economy to reach 6 percent annual growth by 2010 in a bid to halve unemployment by 2014, but Schussler said at the current pace this was not going to happen.

"No matter which data set you look at, the fact is that employment is still growing, but we are off target for the government's goal of halving unemployment by 2014," he said.

According to the report, salary growth has been in single digits over the last few years.

Average salaries in large companies rose by 7,2 percent in 2006 to R12815 a month - outpacing the national salary average, which went up by 6 percent to R10469 a month.

"Another fact is that smaller firms generally pay around 30 percent less than the average salary, while bigger firms pay around 20 percent more than the average salary," the report said.

Average salaries in small firms notched up 5,4 percent to R7378 a month while medium companies added 6,1 percent to push the average salary to R11406 a month.

The report said that there were still big discrepancies between firms, even in the same sector and for the same job. - I-Net Bridge with Sapa

X