SOUTH AFRICA - BE PREPARED FOR MASSIVE JOB LOSSES RESULTING FROM COVID-19 DISRUPTIONS

 South Africans should brace themselves for significant job losses in the next few months as a result of disruptions caused by Covid-19.

That is the view of economists who are predicting what employment will look like by the time the upheavals caused by the pandemic subside.

Senior economist at FNB Siphamandla Mkhwanazi said: “The outlook on global and domestic economic growth has deteriorated materially since the outbreak of Covid-19.

“Supply chain disruptions and the demand dampening effect of containment measures will weigh heavily on output, asset prices, sentiment and consumer spending.

"As a result, we expect significant job losses in 2020, which bodes ill for household income and their ability to spend,” Mkhwanazi said.

Speaking about the latest Quarterly Employment Statistics data, which reflects gains in the number of formally employed people in South Africa released by Stats SA yesterday, Absa economist Peter Worthington said: “While the data is interesting, it is too backward-looking to tell us much about the near-term outlook for the labour market.

"In 2009, when the gross domestic product fell by 1.5%, South Africa lost about 800 000 jobs.The recession is likely to be much deeper this year and could also trigger big job losses, particularly in the private sector and specifically in smaller and medium-sized firms that may not have the balance sheet to absorb the effects of the Covid-19 shock.”

Steel and Engineering Industries Federation of Southern Africa economist Marique Kruger said: “The current challenging operating environment, including the global coronavirus pandemic, make it imperative for stakeholders to continuously engage in efforts to seek sustainable solutions to the persistent and difficult business conditions.”

According to Stats SA: “Total employment increased by 16 000 or 0.2% quarter-on-quarter, from 10 197 000 in September 2019 to 10 213 000 in December 2019.”

Speaking after the release of the data, Kruger said: “Gains in formal employment numbers in the South African economy are not sustainable, especially given the decreasing contributions of labour-intensive sectors such as manufacturing, construction and agriculture to gross domestic product.”

via - IOL