Continuing strike action and labour unrest that has occurred throughout South Africa over the last few months has had a serious impact on the confidence of the country’s graduate professional market, according to the PPS Graduate Professionals Confidence Index, which was published on Tuesday.
The quarterly survey, which tracks the confidence levels of nearly 6 000 of South Africa’s graduate professionals, found that about 71% of respondents believed the labour unrest was part of a wider agenda, leading up to the African National Congress' national elective conference in Mangaung, in December.
PPS head of group marketing and stakeholder relations Gerhard Joubert said in a statement that the conference remained top-of-mind for many professionals, as the outcome would essentially decide who the new president of South Africa was going to be until 2018.
“The ongoing strike action has also had a serious impact on the results, with most categories surveyed recording a fall in confidence. This is not surprising as it has already had a huge impact on our economy, with National Treasury estimating that the impact at the platinum and gold mines has cost the economy more than R10-billion so far this year.
“The fact that this follows two downgrades to the country’s national sovereign credit rating in the last few months, in addition to the perceived political instability, has simply eroded confidence in the image of South Africa, both at home and internationally,” he added.
The report also revealed that the confidence among professionals remaining in South Africa for the foreseeable future fell to a new low of 76%, down 2 percentage points on the previous three months and 5 percentage points year-on-year.
“This is still one of the highest results in the confidence index and is indicative of the fact that most professionals have no plans to emigrate. However, it is to be expected that the events of the past three months would have made some people consider the option of emigrating.”
Confidence in the economic outlook for South Africa over the next 12 months fell 5 percentage points since the last quarter to 55%, but a bright spot was confidence in the local equity markets, which improved by 4 percentage points over the same period to 60%.
“The JSE has continued to hit record highs in recent months, despite all of the uncertainty in the economy, and this has translated into a higher confidence level in the future direction of the stock market. Clearly professionals believe there is still value to be had in local equities,” he said.
Confidence in the future of their profession over the next five years fell to 77% from 79% previously, while only 57% said they would encourage their children to enter their profession, from 60% last time.
Professionals also remain concerned on a number of macroeconomic issues. Confidence that unemployment in South Africa would improve over the next five years fell 2 percentage points to 39% from last quarter, while confidence that crime rates will improve over the next five years also fell 2 percentage points to 41%.
Confidence in the standard of education in South Africa improving over the next five years remained unchanged at 44%.
Joubert concluded that the overall confidence level in the index fell to a record low of 56%, down a marginal 1 percentage point from the previous quarter.
Other results from the survey showed that overall confidence in the ability to earn an income that keeps up with inflation fell 2 percentage points to 68% compared with the second quarter.