Can ANC’s grand plans prevent a skills exodus?

Recovery in mining, manufacturing sectors in other markets could attract skilled South Africans as lower investment and business confidence hits local economy.


A RECOVERY in the mining and manufacturing sectors in Australia, the Middle East and the UK could lead to a skills exodus from South Africa as the private sector’s concern about contagion from the eurozone crisis results in low business confidence, reduced job creation and lower fixed investment.


Although a decline in employment between the first and fourth quarters is a normal seasonal event, the decline in business confidence is not, making it more attractive for skilled South Africans to take their skills to growing job markets.


Online job opportunities in the United Arab Emirates in May 2012 grew by 57% year on year (y/y) according to the Monster Employment Index Middle East index.


Year-on-year growth in online job offers in Kuwait was 49%, in Qatar 34%, in Bahrain 24%, in Saudi Arabia 22% and in Oman 13%.


The Monster Employment Index is a monthly gauge of online job-posting activity in the Middle East, based on a review of tens of thousands of job opportunities culled from career websites.


Formed in 2006, Monster Gulf is one of the main sites for job seekers flocking to the Middle East. The site reached a million job seekers within six months of its launch and now has 4,8-million members.


Approximately 2300 CVs are posted on Monster Gulf every day.


What distinguishes Monster Gulf from other online job portals such as Career Junction is that in most other places, entry-level jobs or junior people form the bulk of the jobs, but about 40% of Monster Gulf’s job enquiries are from people with as much as 10 or 15 years’ experience, which is why it is such a danger for South Africa’s skills base.


Australia’s jobs growth hit an eight-year high after the economy added 38900 jobs in May. This means Australia created 160100 jobs in the January-May period, the most since 2004.


Engineering was the sector seeing the largest year-on-year growth in online job opportunities last month, according to the Monster Employment Index UK.


Such jobs saw a 20% rise from May 2011, higher than that recorded in the public sector, defence & community (14%), human resources (12%), hospitality & tourism (11%) and construction and extraction (also 11%).


In his state of the nation address on February 9, President Jacob Zuma invited the nation to join the government in a massive infrastructure development drive.


“We will use the project management expertise gained during the 2010 Fifa Soccer World Cup to make this project a success.


“The infrastructure plan will be driven and overseen by the Presidential Infrastructure Coordinating Commission, which was established in September, bringing together ministers, premiers and metro mayors under the leadership of the president and the deputy president,” Mr Zuma said.


The commission has identified and developed projects and infrastructure initiatives from state-owned enterprises as well as national, provincial and local government departments.


These have been clustered, sequenced and prioritised into a pipeline of strategic integrated projects.


“We have chosen five major geographically focused programmes, as well as projects focusing on health and basic education infrastructure, information and communication technologies, and regional integration,” he said.


The objectives outlined in the state of the nation address build on the New Growth Path developed under the leadership of Economic Development Minister Ebrahim Patel.


Central to that plan is a massive investment in infrastructure as a critical driver of jobs across the economy.


The framework identified investments in five key areas, namely energy, transport, communication, water and housing.


Sustaining high levels of public investment in these areas will create jobs in construction, and the operation and maintenance of infrastructure.


The New Growth Path envisages the infrastructure programme triggering the development of a local supplier industry for the manufacture of the components for the build programme.


The areas prioritised for job creation are the green economy, agriculture, mining, manufacturing, as well as tourism and other high-level services.


The key question now is whether the grand plans can be turned into bricks and mortar in time to prevent a skills exodus as South African engineering and mining graduates seek greener pastures elsewhere.


Formal-sector employment in South Africa declined by 107000 jobs in the first quarter of 2012 compared with the fourth quarter of 2011, while informal sector employment decreased by 28000 jobs, according to Statistics SA.


The Rand Merchant Bank (RMB) business confidence index plunged to 41 in the second quarter from 51 in the first quarter.


Private-sector fixed investment growth slowed to only 1,8% quarter on quarter at a seasonally adjusted, annualised rate in the first quarter, from 6,2% in the fourth quarter, the Reserve Bank said last month.


“The extent to which confidence fell in the second quarter is striking. Besides activity indicators having deteriorated in all but one sector, other domestic as well as global uncertainties weighed on sentiment.


“In this respect, the increase to an 11-year high in the percentage of manufacturers rating the political climate as a constraint on business, is enlightening,” RMB’s chief economist, Etienne le Roux, said in his commentary on the second-quarter business confidence results.


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