Latest BankservAfrica salary data suggests job market is stabilising
Take-home pay tracked in the BankservAfrica Take-home Index (BTPI) showed a slight recovery in February 2023. The latest data on the number of salaries paid during the month also suggests the local job market is stabilising.
“The average nominal take-home pay rose to R15 186 in February, reaching the highest level since October 2022. However, it remains 1.8% below the R15 469 measured a year ago,” says Shergeran Naidoo, BankservAfrica’s Head of Stakeholder Engagements.
The economic environment remains difficult for many companies challenged by the harsh load shedding, high production costs, elevated interest rates and moderating demand all contributing to dismal growth. However, the latest BankservAfrica data suggests the job market has stabilised.
After two consecutive months of notable declines in the number of salaries paid into South Africans’ bank accounts, BankservAfrica’s data (adjusted for weekly payments) suggests a few jobs were created in February. “Though less than a thousand, stability in the job market is welcomed amid a challenging economic environment. The job market is still recovering from heavy losses that occurred due to the impact of the Covid-19 pandemic,” says independent economist Elize Kruger.
According to the December 2022 Quarterly Employment Statistics report, employment in the non-agricultural business sector stood at 9.968 million at the end of 2022, compared to the pre-Covid level of 10.3 million in Q1 2020. The job market is clearly still playing catch-up, which remains a challenge amid the low growth reality in South Africa.
“With little indication of a notably different economic environment in 2023, but rather even lower economic growth forecasted for 2023 compared to 2022, the job market is likely to remain lacklustre. Furthermore, consumer inflation has been moderating rather slowly, resulting in the ongoing erosion of the purchasing power of households,” says Kruger. Consumer inflation reached a 13-year high of 6.9% in 2022 (2009: 7.1%) and is forecast to average around 5.8% in 2023. However, February’s headline and core inflation rates unexpectedly surprised to the upside, ticking higher to 7.0% y/y and 5.2% y/y, respectively.
BankservAfrica’s data confirms the negative impact of inflation on salaries, with an 8.3% y/y decline in the average real take-home salary in February 2023, compared to a year earlier. This reality has filtered through to lower consumption expenditure by households and a notable drop in confidence levels as reported in the recent FNB/BER Consumer Confidence Index (CCI), which plunged to -23 index points in Q1 2023, indicating the concern among consumers about South Africa’s economic prospects and their household finances.
The BankservAfrica Private Pensions Index (BPPI) in nominal terms remained flat compared to the previous month at R10 054, 6.2% higher than a year earlier, and slightly above the monthly average in 2022, which realised at R9 985, according to Naidoo. In real terms, the average real private pension in February 2023 came to R9 473, marginally lower compared to a year earlier, signalling that the purchasing power of pensioners has largely been preserved amid the high inflation environment. The average nominal pension payment represents 66.2% of the average take-home pay in February 2023.
