The number of people employed in the formal, nonagricultural sector of the South African economy increased by about 155 000, or 1.8%, from March to an estimated 8.67-million employees in June, Statistics South Africa’s (Stats SA’s) latest Quarterly Employment Statistics (QES) survey has revealed.

The quarter-on-quarter increase in employment was mainly driven by the community services industry, which added 143 000 jobs during the three-months ended June, amounting to a 5.8% increase.

BNP Paribas economist Jeffrey Schultz said the second-quarter QES growth was above expectations, compared with only 13 000 jobs created during the first quarter.

During the second quarter, employment in the trade industry also increased by 1%, or 17 000 people, while the construction and finance industries showed increases of 1.2% and 0.1% respectively.

However, employment in the manufacturing sector declined by 6 000 people, or 0.5% quarter- on-quarter, while the mining industry showed a 0.2% decline and the electricity sector lost 1 000 jobs, or 1.6%.

Year-on-year, the total number of formal, nonagricultural employees increased by 229 000 employees, or 2.7%, in June.

“The bulk of the improvement in formal, nonagricultural employment in the second quarter continues to be driven through the public sector with little evidence of labour market traction in the productive private sector,” Schultz said, adding that the “disappointing” employment growth was underpinned by a weak domestic economy coupled with wage settle- ments which had generally been well above the prevailing levels of inflation.

He explained that, as the public sector had accounted for around 70% of the 580 000 jobs created in the formal sector since 2010, this pointed to a government which seemed determined to prop up what would otherwise be a dire labour market environment.

“We are concerned, however, about [government’s] doggedness to achieve this, [despite the] the ever-growing pressure on the fiscus. “This is something that both we and the rating agencies will be watching closely for any evidence of slippage in the October 22 medium-term budget,” Schultz commented.

“Further, the QES also showed that gross earnings by employees in the formal nonagricultural sector increased by 1%, or R3.99-billion, to R408.88-billion during the June quarter.

Meanwhile, Stats SA statistician-general Pali Lehohla said Stats SA would be undertaking a review of the QES sample frame to address discrepancies between the data produced by the QES and data generated through the Stats SA Quarterly Labour Force Survey (QLFS).

He noted that, while there were some differences between the data collected by the two surveys, such as the QLFS including the agriculture sector and data from private household employment, even once the QLFS had been adjusted for these factors, there was still a discrepancy of about one-million people between the two surveys.

Lehohla noted that this was the result of the sample frame of the QES being unstable, explaining that the data for the QES had been collected from business registers.

While these business registers, kept by the South African Revenue Service and the Companies and Intellectual Property Commission, had improved over time, more work still had to be done, he added.

Over the course of the next two years, Stats SA would improve the sample frame for the QES by firstly assessing taxpayers’ IRP5 data and then integrating this into the business register.