THE South African economy will shed more jobs in the coming months, particularly in mining and manufacturing, according to an employment report by the trade union Uasa.
The job loses will pose a challenge for SA to invest more in tourism and other alternative sectors to support job creation and economic growth, said Economists.co.za chief economist Mike Schussler, who presented the report on Tuesday.
Another union, Solidarity, estimated on Tuesday that 58,549 workers could lose their jobs this year, with more than 29,000 jobs on the line in the mining sector and 8,000 in the metal and engineering industry.
In a presentation, the union, which mostly represents skilled workers, said companies where its members work had received 88 lay-off notices in the past 12 months.
"The current pattern and wave of retrenchments are very similar to the situation at the end of 2008 and the beginning of 2009 which was the precursor to the recession," Solidarity General Secretary Gideon du Plessis said.
Mr Schussler said the fact that employee costs have risen despite adding little value to production is the "clearest indication that large retrenchments" are yet to follow in the mining sector.
He said mining and manufacturing were affected by low global commodity prices, weak demand, and high labour costs which were not accompanied by higher productivity.
Uasa has already received over 5,000 retrenchment notices in various sectors, implying that "employment levels are bound to decline", according to Mr Schussler.
He said economic growth this and next year would be "stagnant". Forecasts by most, including the Treasury and the Reserve Bank, are for the economy to grow below 1% this year.
SA could soon have 10-million unemployed people (using the expanded definition of unemployment) if industries and the economy did not grow, Mr Schussler said.
The country’s expanded definition of unemployment, which includes people that have given up actively looking for work, is closer to 40% compared with the official definition which puts unemployment at 25%.
With Reuters
