SA’s average nominal take-home pay rose nearly 6% in July, according to a new BankservAfrica report, as the business environment and confidence levels improve.
The BankservAfrica Take-Home Pay Index (BTPI) shows a 5.9% jump for July year on year. While this growth in wages is a positive sign, it is tempered by the rise in unemployment in the first half of the year.
Take-home pay increased from R15,452 in July 2023 to a more-than-expected R16,358 this year, reflecting an improved business environment.
Relief from load-shedding for nearly five months, lower inflation, a new political situation and the possibility of lower interest rates soon have helped to lift confidence.
BankservAfrica measures BTPI monthly by dividing the total value of salaries deposited into employees’ bank accounts (excluding those exceeding R100,000 a month) by the total number of salary payments.
This index measures salary payments processed through the National Payment System via EFT messages handled by their systems.
“While the increase in take-home pay is encouraging, it masks the stark reality that the unemployment rate increased in the first half of 2024, with 73,000 job opportunities lost compared to end 2023.”
The report points out that the unemployment rate increased from 32.1% in the fourth quarter of 2023 to 33.5% in the second quarter of 2024. “It has become evident that the better outcome on salary increases has in some instances been detrimental to existing opportunities.”
According to the BankservAfrica Private Pensions Index (BPPI) report, the SA economy urgently requires a supportive environment to drive rapid growth and generate jobs.
Some advancements that have been made by Operation Vulindlela — an initiative launched by the presidency and the National Treasury in 2020 to expedite structural reforms and stimulate economic growth — have enhanced confidence.
Independent economist Elize Kruger said: “If this trend is sustained for the remainder of the year, 2024 will likely be the best year for salaries since 2020 with the increase in average nominal BTPI beating inflation. Improved purchasing power will go some way to supporting cash-strapped household budgets.”
The pensions index, which monitors pension payments to about 700,000 retirees, shows a moderation in nominal and real terms in July. The average nominal private pension decreased to R11,180 in July from R11,270 the previous month, though it remains 2.1% higher than at the same time in 2023.
Comparing the average nominal BPPI for the first seven months of 2024 with the same period last year shows a 5.2% increase. However, the real, inflation-adjusted, BPPI has remained steady.
“This still suggests that average private pension payments stay on track with average inflation so far in 2024. The pension industry is currently in sharp focus given that the two-pot retirement system will be implemented on September 1.
“The new dispensation will likely create a greater awareness among members about their retirement savings, which is welcomed and helpful, but a widespread campaign is needed to educate members about the details,” according to the BTPI report.
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