[ad_1]
The unexpected headline inflation increase in March, among other factors, led to take-home pay slipping marginally during the month, according to the latest BankservAfrica Take-home Pay Index (BPTI).
However, a new trend is emerging in the local job market as more companies operate under the challenging economic environment of persisting load shedding and higher costs.
“The average nominal take-home pay in March declined on a monthly basis to R15,321,” said Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements. “However, this was still 1.8% higher than the R15,046 recorded a year earlier.”
Salaries measured in the BTPI have been disappointing over the last 12 months, Naidoo said.
Consumer inflation reached a 13-year high of 6.9% in 2022 (2009: 7.1%), resulting in a notable erosion of the purchasing power of households.
March’s headline inflation unexpectedly surprised to the upside, ticking higher to 7.1% y/y against expectations of 6.9%, with broad-based price pressures suggesting a sticky pricing environment.
The recent depreciation in the rand exchange rate and additional cost of production due to load shedding and related extra expenditure has clearly added an additional layer of costs to the economy.
“With inflation remaining elevated for longer than hoped for and little indication of a notably different economic environment in 2023, salary adjustments and the job market will likely remain lacklustre this year,” said independent economist, Elize Kruger.
BankservAfrica’s data – adjusted for weekly payments – suggests some jobs were created in February, and the data for March confirms the hesitant recovery with about 216 000 more salaries paid.
The local job market is still recovering from the heavy job losses incurred during the Covid-19 pandemic, which remains a challenge amid the low growth reality in South Africa. According to the March 2023 Quarterly Labour Force Survey, total employment stood at 15.9 million at the end of 2022, compared to the pre-Covid level of 16.4 million in Q4 2019.
BankservAfrica data suggests more volatility in lower income categories, indicating companies are opting for more contract or casual workers over permanent positions.
“The average take-home pay has also moved mostly sideways since 2021, indicative of low to unchanged salary adjustments in the current ‘survival’ economy,” said Kruger.
During March, private pensions were also impacted by inflation, according to the BankservAfrica Private Pensions Index (BPPI).
“On a monthly basis, the nominal average private pension slipped marginally to R10 036, 6.7% higher than one year earlier, and slightly above the monthly average in 2022, which was realised at R9 987,” says Naidoo.
In real terms, the average real private pension in March 2023 came to R9 414, just marginally lower compared to a year earlier, signalling that the purchasing power of pensioners has been largely preserved amid the high inflation environment.
BankservAfrica will be publishing a ‘Five-year Review of Take-home Pay and Private Pensions’ special report in May 2023, offering a review of the major developments in these indices since 2018.
Read: The proposed salary hikes for Ramaphosa, ministers and other millionaire politicians in South Africa
[ad_2]
Source link