Steep Decline in Job Creation for Q1 2016


Friday, September 16, 2016 9.23am/FBNQuest Research 

The NBS recently released its latest Job Creation Survey. This defines the formal sector as consisting of establishments with ten or more employees, and is based on a sample of 5,000 firms across the 36 states of the federation.  

The data shows that only 79,465 jobs were created in Q1 2016, divided between 21,477 jobs in the formal sector and 61,026 jobs in the informal sector. Meanwhile the direct opposite was the case for the public sector, which recorded 3,038 job cuts. This mirrors the economic slowdown observed in Q1, when GDP contracted by -0.4% y/y (and grew by a marginal 0.8% q/q).  

When compared with the previous quarter, total job creation declined sharply by 84% from 499,521.


The bureau’s report focuses on 18 sectors. Education emerges again as the leading source of new formal-sector jobs in Q1 2016, accounting for 60%. Manufacturing, agriculture, and food and accommodation services contributed 7%, 5% and 4% to the total respectively.

We see that senior management, professional and technical positions accounted for 33% of formal-sector jobs generated.

For the public sector, 5,726 jobs were generated in Q1 2016. However, this was outweighed by the number of losses, which amounted to 8,764 in the same quarter, resulting in net employment of -3,038. Compared with Q4 2015, which recorded total job losses of 10, 155 and net employment of -4,288, retrenchment was at a slower pace.


In view of the current macro challenges, the business environment has deteriorated. Only a few companies will take on additional labour. For the public sector which is struggling to pay salaries (as seen in most states), its easiest option is to lay off workers to ease pressure on recurrent expenditure.

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