Economy hanging in the balance: Employment and wage prospects remain weak
26 March 2018
The South African economy is hanging in the balance, with ambiguous market and political trends at play that could sway economic fortunes considerably in the years ahead. This view comes from Solidarity trade union which released the South African Labour Market Index (LMI) for the fourth quarter of 2017 today.
The LMI, which forms part of the South African Labour Market Report compiled in collaboration with ETM Macro Advisors, is ʼn an indicator of job and wage security in the South African labour market. The LMI has risen to a neutral level just below 50, indicating that both positive and negative forces are impacting the South African labour market.
The Q4 2017 index relies on data compiled before the major political events seen in Q1 2018. These events included the appointment of President Cyril Ramaphosa, a cabinet reshuffle, and the controversial parliamentary motion on expropriation without compensation.
According to Gerhard van Onselen, Senior Economics Researcher at the Solidarity Research Institute, the Q4 results should be interpreted with caution. “Over the last number of quarters, the index has been edging toward neutral levels and presently stands at 49, which is still below 50. On our index, a healthy and improving economy should reflect in LMI readings of 55 to 65.