Despite a host of negative factors that impacted the economy, the average nominal BankservAfrica Take-home Pay Index (BTPI) ticked marginally higher in September 2022.
The average nominal South African salary (after deductions), recovered slightly to R15 063 in September, compared to a revised R14 711 in August 2022.
Though still down from the 2022 high of R15 638 reached in February and still 1,3% lower compared to a year earlier, a 2,4% increase was recorded compared to the preceding month, which is encouraging.
While it appears that the average nominal take-home pay has stabilised somewhat in the past two months, salaries have still lagged compared to average headline inflation in 2022.
In line with expectations, consumer inflation moderated somewhat off the 13-year high of 7,8% reached in July, to 7,5% in September, but remains at elevated levels.
The moderation was driven by lower fuel prices, but the notably higher food prices and a broader-based upward pressure evident in the consumer basket’s prices offset the impact and remains a concern.
The South African Reserve Bank already hiked the benchmark interest rate by a cumulative 275bps since November 2021 and signalled that more hikes are on the cards.
The average salaried person’s finances are likely to remain strained as reflected in the 8,3% y/y decline in the real average salary recorded in the BTPI in September. However, as it was forecasted that July’s 7.8% headline CPI print would be the upper turning point of the current inflation cycle, the pressure should start to alleviate slightly as inflation moderates towards year-end.
BankServAfrica forecasts that inflation could be around 7,2% by year-end.
Adjusted for weekly payments, BankservAfrica’s BTPI data suggests job losses occurred in September as the number of salaries paid declined after five consecutive months of growth between April – August 2022.
The economy buckled under the pressure of higher load shedding levels, which has led to companies and employers experiencing ongoing hardship.
Over and above the prolonged energy supply problems are the elevated input costs, rising interest rates and increasingly higher wage demands placing downward pressure on company profits and margins.
Furthermore, the less favourable global economic backdrop has amplified the economic challenges of many sectors.
Average private pensions have held up well despite rising inflation
Slight downward pressure was evident in the BankservAfrica Private Pensions Index (BPPI). The average nominal private pension slipped below R10 000 per month again, after three consecutive months above this level.
Compared to a year earlier, the nominal pension was 5,5% higher in September, a moderation compared to growth of 8,5% in August. In real terms, the average private pension also moderated further to R9 428 in September, 1,9% lower than a year earlier.
Although September has been a weaker month for average pension payments, average real pensions have held up reasonably well in 2022 despite rising inflation, largely preserving the purchasing power of pensioners.
Take-home pay
The value of total take-home pay and private pension payments processed in September increased by 1,1% in real terms and by 8,7% in nominal terms compared to a year earlier, not seasonally adjusted.
The BankservAfrica Take-home Pay Index data
| Month
|
Nominal average take-home pay | Real take- home pay
|
Nominal BTPI % change YoY | Real BTPI % change YoY | Nominal average pensions paid | Real private pension
|
Nominal BPPI % change YoY | Real BPPI % change YoY |
| Jan-21 | 15416 | 16095 | 2.9% | -0.2% | 9138 | 9539 | 12.0% | 8.5% |
| Feb-21 | 15425 | 16116 | 4.7% | 1.7% | 9130 | 9569 | 8.9% | 5.9% |
| Mar-21 | 15127 | 15797 | 3.8% | 0.7% | 9089 | 9533 | 8.6% | 5.2% |
| Apr-21 | 15335 | 16021 | 6.7% | 3.1% | 9149 | 9583 | 10.5% | 5.8% |
| May-21 | 15047 | 15701 | 4.4% | 0.1% | 9004 | 9433 | 11.5% | 6.0% |
| Jun-21 | 14922 | 15564 | 4.3% | -0.5% | 9304 | 9564 | 11.7% | 6.5% |
| Jul-21 | 14515 | 15126 | 4.9% | 0.0% | 9286 | 9525 | 10.8% | 5.8% |
| Aug-21 | 14861 | 15356 | 8.1% | 3.1% | 9365 | 9585 | 10.1% | 4.9% |
| Sep-21 | 15255 | 15650 | 9.1% | 4.1% | 9389 | 9611 | 9.7% | 4.5% |
| Oct-21 | 15275 | 15414 | 1.7% | -3.1% | 9685 | 9622 | 9.5% | 4.3% |
| Nov-21 | 15246 | 15253 | 0.1% | -4.7% | 9568 | 9470 | 6.6% | 1.1% |
| Dec-21 | 15565 | 15397 | -0.1% | -5.2% | 9640 | 9506 | 7.1% | 1.1% |
| Jan-22 | 15567 | 15380 | 1.0% | -4.4% | 9635 | 9516 | 5.4% | -0.2% |
| Feb-22 | 15638 | 15448 | 1.4% | -4.1% | 9695 | 9617 | 6.2% | 0.5% |
| Mar-22 | 15099 | 14909 | -0.2% | -5.6% | 9591 | 9496 | 5.5% | -0.4% |
| Apr-22 | 15345 | 15149 | 0.1% | -5.4% | 9481 | 9377 | 3.6% | -2.1% |
| May-22 | 14899 | 14653 | -1.0% | -6.7% | 9752 | 9592 | 8.3% | 1.7% |
| Jun-22 | 14661 | 14347 | -1.8% | -7.8% | 10147 | 9710 | 9.1% | 1.5% |
| Jul-22 | 14382 | 13972 | -0.9% | -7.6% | 10300 | 9796 | 10.9% | 2.8% |
| Aug-22 | 14711 | 14124 | -1.0% | -8.0% | 10162 | 9665 | 8.5% | 0.8% |
| Sep-22 | 15063 | 14356 | -1.3% | -8.3% | 9901 | 9428 | 5.5% | -1.9% |
Source: BankservAfrica