Results of the arithmetic formula

Table 3 below reports the employment intensity estimates obtained from the arithmetic formula over the following sub-periods: 1970 to 1980, 1981 to 1990, 1991 to 2000, 2001 to 2010 and 2011 to 2014. For the period 1970 to 1980, communication had the highest employment intensity, with an employment elasticity of output of 3,796; a change in real valued added in this sub-sector created the highest number of employment opportunities across all sub-sectors in South Africa over this sub-period. Business services and medical, dental and veterinary services had the second- and third-highest employment elasticity of output respectively. Other sub-sectors with high employment elasticities of output include ‘excluding medical, dental and veterinary services’, coke and refined petroleum products, as well as ‘other services’. Building construction had the lowest employment elasticity of output, with a negative value of 4,575. Other sub-sectors that had negative employment elasticities of output include trade, catering and accommodation services as well as gold and uranium ore mining.

For the period 1981 to 1990, furniture had the highest employment elasticity of output; changes in real valued added in this sub-sector created the highest number of employment opportunities across all sub-sectors over this sub-period. Sub-sectors that created the second- and third- highest employment opportunities from changes in real value added were business services and basic iron and steel. ‘Excluding medical, dental and veterinary services’ had the fourth-highest employment elasticity of output. Conversely, sub-sectors such as wearing apparel, transport and storage and water supply had negative results for employment elasticity of output.

For the period 1991 to 2000, the finance and insurance sub-sector generated the most employment opportunities, from changes in this sub-sector’s real value added. Non-metallic minerals and building construction created the second- and third-highest employment opportunities resulting from a change in real value added of these sub-sectors. Machinery and equipment is ranked as the fourth most labour-intensive sub-sector. ‘Other manufacturing’, beverages, and basic iron and steel all produced negative employment elasticity of output results. Wearing apparel and other transport equipment had the highest employment elasticities during the period from 2001 to 2010. Basic chemicals and beverages were ranked third and fourth respectively. Conversely, coal mining, wholesale and retail trade, other services, and trade, catering and accommodation services revealed negative elasticities.

In the post-financial crisis period from 2011 to 2014, ‘other chemicals’ and man-made fibers had the highest employment elasticity of output. ‘Excluding medical, dental and veterinary services’ as well as wholesale and retail trade were the second and third highest employment-intensive

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sub-sectors respectively. Sectors that showed negative employment elasticity of output results include civil engineering and other construction, electrical machinery and apparatus, and wearing apparel.

It is evident that the employment elasticities of various sub-sectors vary over different periods. For instance, communication was the most labour-intensive sub-sector for the period 1970 to 1980. However, from 1991 to 1990 and in the subsequent periods, this sub-sector revealed a negative employment elasticity of output. Similarly, business services was the second most labour-intensive sub-sector from 1970 to 1980 and 1981 to 1990. However, from 2001 to 2010 and 2011 to 2014, this sub-sector produced negative employment elasticities of output. With the exception of two periods, 2001 to 2010 and 2001 to 2010, ‘excluding medical, dental and veterinary services’ was one of the most labour-intensive sub-sectors in South Africa.

Overall, it is evident that sub-sectors have different employment elasticities of output across different periods. According to the results of this method, none of the sub-sectors have consistently achieved a high employment elasticity of output throughout the different periods under analysis. This shows the heterogeneity in sub-sectors’ employment elasticity of output in different periods.

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Table 3: Employment elasticity of output for different sub-sectors in South Africa based on the arithmetic formula for the different periods

Subsector Periods

1970 to 1980 1981 to 1990 1991 to 2000 2001 to 2010 2011 to 2014

Elasticity Ranking Elasticity Ranking Elasticity Ranking Elasticity Ranking Elasticity Ranking Basic chemicals 0,804 15 0,270 24 -0,262 26 0,294 3 -1,942 40 Basic iron and steel 0,844 14 1,704 3 -3,607 44 -0,007 13 0,126 8 Basic non-ferrous metals 0,471 32 -0,673 38 -0,573 32 -2,047 36 -0,122 26 Beverages 0,535 27 0,546 22 -9,830 45 0,291 4 -0,083 22 Building construction -4,575 46 -0,074 34 4,854 3 -0,121 19 0,788 4 Business services 2,076 2 16,038 2 1,721 5 -2,050 37 -0,292 31 Civil engineering and

other construction

0,121 41 -1,298 41 0,393 21 -1,933 30 -2,938 46 Coal mining 0,635 23 -0,614 37 -1,522 39 -2,622 46 -0,205 30 Coke and refined

petroleum products 1,557 5 0,116 30 -0,579 33 -2,125 41 -0,009 17 Communication 3,796 1 0,264 25 -0,327 27 -2,035 35 -0,016 18 Electrical machinery and apparatus 0,364 35 -0,882 39 -0,363 28 -2,030 34 -2,865 45 Electricity, gas and

steam

0,884 12 -0,046 33 -0,636 35 -0,252 23 0,207 7 Excluding medical,

dental and veterinary services

1,685 4 1,701 4 0,686 17 -1,804 25 1,021 2 Finance and insurance 0,76 18 0,946 15 32,539 1 -1,922 28 -0,155 27 Food 0,508 30 0,837 17 -1,907 41 -0,025 15 -0,472 33 Footwear 0,449 33 -0,336 36 1,404 9 0,178 7 -1,998 41 Furniture 0,351 38 85,261 1 0,176 23 0,139 9 -1,685 39 General Government 1,411 7 0,935 16 -1,564 40 0,055 12 0,058 11 Glass and glass

products

0,142 40 0,194 28 -2,297 42 -1,988 32 -2,071 42 Gold and uranium ore

mining

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Subsector Periods

1970 to 1980 1981 to 1990 1991 to 2000 2001 to 2010 2011 to 2014

Elasticity Ranking Elasticity Ranking Elasticity Ranking Elasticity Ranking Elasticity Ranking Leather and leather

products

0,798 16 1,573 6 -0,422 29 0,104 10 -0,300 32 Machinery and

equipment

0,615 25 0,538 23 2,110 4 -0,122 20 0,019 15 Medical, dental and

veterinary services

1,861 3 1,041 14 0,916 14 -0,153 22 0,054 12 Metals products

excluding machinery

0,357 36 0,148 29 -0,521 31 0,077 11 -0,099 24 Motor vehicles, parts

and accessories

0,658 22 1,182 12 -0,097 25 -1,946 31 0,009 16 Non-metallic minerals 0,562 26 -1,141 40 27,66 2 -0,047 17 -0,158 28 Other chemicals and

man-made fibers 0,355 37 0,676 18 0,097 24 -1,888 27 1,435 1 Other manufacturing 1,362 8 0,224 27 -15,758 46 -2,169 42 0,095 10 Other mining 0,619 24 0,112 31 -0,621 34 -0,017 14 -1,252 36 Other producers 0,085 43 -0,294 35 0,69 16 -2,088 39 0,097 9 Other services 1,461 6 1,265 11 0,931 13 -2,206 44 0,748 5 Other transport equipment 0,911 10 1,064 13 0,641 19 0,437 2 -0,106 25 Paper and paper

products

0,102 42 1,649 5 -0,477 30 0,193 5 -0,185 29 Plastic products 0,499 31 1,507 8 0,419 20 0,189 6 -0,806 35 Printing, publishing

and recording media

0,900 11 -1,511 42 1,098 12 -1,819 26 -2,182 43 Professional and

scientific equipment

0,447 34 1,273 10 0,328 22 -0,045 16 -1,582 37 Television, radio and

communication equipment 0,867 13 0,611 21 1,249 11 -0,142 21 0,041 14 Rubber products 0,522 28 1,358 9 -0,753 36 -1,735 24 0,720 6 Textiles 0,309 39 0,251 26 1,539 6 -1,933 29 -0,055 20 Tobacco 0,750 20 0,648 19 0,720 15 -2,081 38 -0,041 19

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Subsector Periods

1970 to 1980 1981 to 1990 1991 to 2000 2001 to 2010 2011 to 2014

Elasticity Ranking Elasticity Ranking Elasticity Ranking Elasticity Ranking Elasticity Ranking Trade, catering and

accommodation services

-1,886 45 0,613 20 -2,810 43 -2,201 43 -0,058 21 Transport and storage 0,726 21 -7,082 45 -0,770 37 0,148 8 -0,097 23 Water supply 1,050 9 -1,722 44 -0,815 38 -2,100 40 0,053 13 Wearing apparel 0,755 19 -17,725 46 1,292 10 0,524 1 -2,522 44 Wholesale and retail

trade

0,785 17 1,556 7 0,661 18 -2,398 45 0,869 3 Wood and wood

products

0,520 29 -1,546 43 1,505 7 -0,053 18 -0,507 34

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