Formal non-agricultural employment fell in Q1 23 while real employee earnings remained under pressure

Stats SA published its Q1 23 Quarterly Employment Statistics (QES), its enterprise-based survey of formal non-agricultural jobs and employee earnings trends. Total formal non-agricultural employment fell by 21k in Q1 23, largely driven by job losses in domestic trade (-36k) and the ‘financial intermediation and business services’ (-32k) sectors, with the decline in the former likely reflecting in part the seasonal reversal of festive season hirings.

These more than offset a notable jump of 41k in ‘community, social and personal services’ employment, which was mostly driven by big job gains in provincial government departments. With the Q1 23 decline, total formal non-agricultural employment is down 97k relative to Q1 22, indicating some recent downward pressure on jobs amid a series of adverse shocks on the economy. Moreover, formal employment is 324k below the pre-pandemic level (Q4 19).

The earnings side of the QES show that average earnings per worker improved to 6.5% y/y in Q1 23 from 5.1% in Q4 22, but implying that workers’ earnings continued to fall in real terms. The long release of the QES gives these data a strong backward-looking tilt but these are still a useful read of the labour market challenge against consumer spending. The BER’s Q2 23 Consumer Confidence Index due out at noon tomorrow will also be a key pulse check on the consumer.

Source: Stats SA, Absa Research

Overseas tourist arrivals rebounded significantly in May after accounting for seasonal factors. 

Tourism migration data published by Stats SA yesterday show that overseas tourist arrivals rose 8.1% m/m sa in May, after falling 4.4% in April. Arrivals in May were about 1.4 times of those in May last year, indicating a relatively robust pace of recovery over the past year.

However, tourist arrivals were still 18.6% lower compared with pre-pandemic levels (i.e., Q4 2019). Data published by Stats SA last week showed that business income in the accommodation sector in April this year was about 23% below pre-pandemic levels. Looking ahead, the strength of the global economy and sentiment around South Africa amid ongoing electricity supply challenges may affect the pace of recovery in the tourism industry.

Eskom announced a slight escalation of load shedding from this morning. 

A delayed return to service of some generation units has forced the utility to implement Stage 2 load shedding during the day from 7:00 to 16:00, while Stage 3 will remain in the evenings. This is the first time since 6 June that the utility is implementing rotational power cuts during the day on a weekday. Eskom’s last detailed statement on Sunday showed an energy availability factor of 56% of installed capacity due to breakdowns amounting to 16 524MW, while a further 4 376 was offline due to planned maintenance.