A year after hard lockdown, the BankservAfrica Take-home Pay Index (BTPI) for March 2021 is close to recovery following months of ups and downs in the number of salaries paid during the pandemic-hit economy.
While salaries in the formal sector have experienced a fast recovery to date, the number of weekly and monthly take-home payments are beginning to take-off with slight increases.
“The real take-home pay increased by 0,7% in March 2021 with the average salary reaching R15 092 in nominal terms and R12 749 in real terms,” says Shergeran Naidoo, BankservAfrica’s head of stakeholder engagements. “These figures show a return to the pre-Covid-19 trend as the number of employees in the broader payment system of formal employers from larger companies is in a better state after the economy’s reopening.”
When the hard lockdown began in March 2020, the BTPI reported a drop in the number of payments made to daily and weekly workers. This was marginal for the formal economy.
“In March 2021, we are seeing a small increase in the number of weekly and monthly take-home payments while daily payments continue on a declining trend,” explains Mike Schüssler, chief economist at economists.co.za.
Still, the overall number of take-home payments in March 2021 was slightly higher than the previous year’s. “The year-on-year change came in at under 1%, which we believe marks the turning point for employment numbers improving from the depth of the pandemic. The BTPI is gradually returning to normal,” says Schüssler.
However, the current improvements are a ‘recovery’ as the actual employment numbers are still slightly below the BTPI’s average.
“All in all, it is good news that 95% of private sector jobs in larger firms have recovered. But, with daily and weekly payments still far below normal, one can assume that smaller firms and the informal sector have a long way to go for recovery,” says Schüssler.
Private pensions returned to normal in March 2021 following last month’s extra payments to state pensioners, as the BankservAfrica Private Pensions Index (BPPI) showed.
“The average real private pension banked was R7 623 in March 2021. In today’s money, the private pension averaged R9 139 for March 2021,” says Naidoo.
Private pensions breached the 60% level of salaries for the first time since September 2020. It was also the fifth consecutive month that real pensions grew above 5% on average while the year-on-year increase was 5,6% compared to the 4% increase in March 2020.
According to the BankservAfrica data, the overall total salaries and pensions paid increased by 1,8% in real terms compared to March 2020. But the overall amount is 6% lower in nominal terms than in March 2019.
“We believe a further test on the actual economic recovery will come when the last TERS and disaster relief payments have been made by government,” says Schüssler. “The actual new growth in the economy is probably a little way off but it has been faster than one would have expected and should help consumer spending.”