MANUFACTURING, and other sectors of the economy targeted in the government's New Growth Path policy to increase employment in SA, shed the most jobs last month, according to the Adcorp Employment index.

The mining sector lost the second-most jobs, and construction the third most.

The Adcorp index is compiled and released monthly, unlike Statistics SA's quarterly Labour Survey which provides pointers every three months.

Employment fell 2,1% year on year, the fourth month in a row that it fell, Adcorp said yesterday. Of the month's losses, manufacturing shed 19,9%, construction 16% and mining 9,3%.

Brait economist Colen Garrow said sectors more involving consumers registered positive rates of growth, with retail employment up 3,7% and the financial sector up 3%. Overall, 49306 jobs were destroyed last month.

SA has now lost 989239 permanent jobs since the beginning of the 2008-09 recession. This includes 100087 jobs lost since the economy began to recover in the post-recession period.

Public sector employment grew by 6,2% last month. In the New Growth Path document, the government committed itself to filling all its vacancies this year.

Adcorp economist Loane Sharp said, given other job losses throughout the year, the public sector accounted for all formal job creation in SA in the year so far.

On a net basis, the private sector had not created employment this year. "Although there were recent job gains in retail and the financial services, jobs were lost in manufacturing, mining and elsewhere," he said.

However, he saw one positive force for job creation in SA. "Job creation in the informal sector has been explosive. The sector employed 16917 additional people in August. I think lessons can be learned from this; we need to relax our labour laws," Mr Sharp said.

Informal-sector employment, characterised by employers who do not pay taxes or comply with labour laws, represented 6,2-million workers - or 37,2% of all people employed in SA.

Since 2000, informal-sector employment has grown from 3,4- million, an increase of 182%.

The job casualties in manufacturing and mining were in line with the poor recent performances of those sectors.

Manufacturing output contracted 6% and mining output 5,1% year on year in July. Strikes were blamed , but economists remain concerned that these key production sectors not only produced fewer jobs, but were also not creating an environment to retain staff.

Mr Garrow said industries such as mining and manufacturing were likely to struggle in the long term. "Broadly, the supply sectors will continue battling, and while they do, it will be difficult to create the type of jobs needed to promote our gross domestic product."

The financial and retail sectors, which are not targets of the New Growth Path plan, grew the most jobs last month. "The sectors that shed the most jobs were exactly those in which the New Growth Path intends creating them.... Construction also shed jobs, disappointing since infrastructure development is the bedrock on which the New Growth Path is premised," Mr Garrow said.

Adcorp said it had found that temporary work bore a close relationship to the economy's underlying health and may be considered a leading indicator of permanent employment conditions.

"Permanent jobs, which are beset by legal and regulatory problems, are an unreliable indicator of business activity," Adcorp said.

Last month the capacity utilisation of temporary staff - the number of hours actually worked in relation to the available hours per temporary job - dropped to 74,6%. "This was a decline of 8,1% at an annual rate, the worst decline in four months," Adcorp said.

Compared with a year ago, the number of temporary workers increased 4,5% last month, but their average monthly working hours fell 20,6%.

Overall, capacity utilisation of temporary workers dropped 9% last month compared with a year ago and by 24,1% compared with the peak in April .

"This suggests that employment conditions remain exceedingly weak and continues to suggest that the prospect of an improvement in permanent jobs, which tend to lag behind temporary jobs, is a long way off," Adcorp said.

andersona@bdfm.co.za