are likely to see a pick-up in monthly economic activity, particularly for informal businesses.
“According to the BankservAfrica Take-home Pay Index (BTPI), the average South African salary in nominal terms increased to R15 821 in February 2021, following the R15 608 in the previous month,” says Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements. “The low inflation rate together with the better performing economy in February certainly contributed to this.”
The average take-home pay increased by 1,6% above the rate of inflation.
However, the real increases for the average wages reflect the fewer number of daily and weekly paid employees in the system and their overall decline in the BTPI data. The average fall in the monthly equivalent of daily wage earners was -10.6%, while monthly paid workers decreased by -2.8%. This has resulted in a far lower share of daily paid employees in the system.
The value of real total take-home pay paid to all employees paid via BankservAfrica through the National Payment System increased by only 0,2%.
“While the lower employment figures remain a matter of concern, our data also indicates that this is the first time since May 2020 that the overall total salaries paid showed a positive increase,” says Mike Schüssler, chief economist at economists.co.za. “This will contribute to better consumer spending in February. While it’s too early to predict how it may unfold in the months to come, we can, on the take-home pay side, confirm that the declining trend in total salaries appears to have reached an end.”
In February, government pensioners, as well as one or two other pension types, received extra payments. Nearly a million pension payments were paid to an estimated 650 000 pensioners in the BankservAfrica Private Pension Index (BPPI).
“As such, there has been a 61% real increase in total pensions paid for pensioners receiving less than R100 000 payment for the month of February,” says Naidoo. It has also boosted the average BPPI by 5,6% year-on-year.
February was the fourth consecutive month that the real average private pension increased by more than 5%. The 5,6% increase means that the average private pension in real terms was R7 627.
In nominal terms, the average private pension remained over R9 000 for the second consecutive month.
“Private pensions are making a difference in the economy, particularly at this time when economic activity has been weighed down by the COVID-19 pandemic and lockdowns,” says Schüssler.
Total private pensions paid increased by 61% in real terms and added about R3 billion to the total spending in February, which equals the R3-billion that the ‘new state of disaster’ grant pays to 6-million unemployed people.
According to our February data, the total nominal increase for all deducted money flowing into bank accounts of workers and private pensioners were 9,2%.
“One can expect retail sales and consumer services to soar in February. Although this may not be sustained in the months to come, the economy – particularly informal businesses – will get an unexpected boost from civil servant pensioners spending from extra payments,” ends Schüssler.