The overall environment for employment in South Africa has become much more negative and will remain so until 2010, staffing solutions group Adcorp said on Wednesday.

This followed the release of the Adcorp Employment Index which showed a quarter-on-quarter decline of 12,9%the group said.

"The environment is influenced by the substantial decline in macro-economic activity (17,1%) and the demand for labour that is down by 5,7%."

The group said that while the construction, logistics and warehousing, communications and information technology; government and personal services sectors remained robust and were showing net employment growth, other sectors were under pressure.

"The sectors that are under substantial strain and show employment losses are mining; manufacturing; retail and wholesale trade as well as finance, real estate and business services," said Adcorp Holdings chief executive Richard Pike.

"There are however certain skills that remain in high demand, particularly in the financial services; engineering; natural and physical sciences; medical and health; education as well as information and communication technology sectors," he added.

Owing to the economic environment, supply of skills was again marginally up by 0,5% and for the second consecutive quarter exceeded demand for skills in the country.

This trend was expected to continue until the second or third quarter of 2010.

In spite of the labour movement's pressure on employers for higher wages, the remuneration index was also down by 5,6% and was reflective of the pressures on the South African economy translating into pressure on remuneration trends, Adcorp said.

Salary increases were currently tracking at between 8% and 9%, but were expected to decline to between the 6% to 8% levels by the end of 2009 in line with consumer inflation figures.

Pike said that although the Adcorp Employment Index was showing a sharp decline and trending downward, it was not in major negative territory yet.

"It is currently at the same levels as the first quarter of
2005," he said.

"Although the overall supply of skills exceeds demand, shortages still exist in those sectors that are especially linked to our country's major infrastructure development projects; government; personal services and information and communications sectors," Pike said.