The economic environment remains exceptionally challenging for companies, with harsh load shedding, high production costs due to high fuel prices and rising wage demands, elevated interest rates and moderating demand all contributing to dismal growth.
THE AVEARGE nominal take-home pay declined again by 7.5% in January this year to R14,305, compared to the same period last year, according to the BankservAfrica Take-home Pay Index (BTPI).
The African automated payments clearing house, which compiled the index, said that the economic environment remained exceptionally challenging for companies, with harsh load shedding, high production costs due to high fuel prices and rising wage demands, elevated interest rates and moderating demand all contributing to dismal growth.
Shergeran Naidoo, BankservAfrica’s head of Stakeholder Engagements, said the average nominal take-home pay for January was R14,305, which was 7.5% lower than the R15,467 recorded in January 2022.
“On a monthly basis, January’s nominal average take-home pay was also somewhat lower than the R14,684 in December.”
Many companies had recently indicated a shift in focus from potential expansion and investment to becoming less dependent on Eskom, that is, capital earmarked for investment was redirected for self-sufficiency.
“This conservative ‘survival’ approach does not bode well for employment growth in South Africa, and also keeps a lid on salary increases,” BankservAfrica said.
Independent economist Elize Kruger said while employment levels increased notably last year, though still catching up to the job losses incurred during the Covid-19 pandemic, January this year showed the opposite.
“Adjusted for weekly payments, BankservAfrica’s data suggests that 606,500 less salaries were paid into South Africans’ bank accounts in January 2023 compared to the previous month. Sixty percent of these job losses occurred in salary categories for people earning less than R5,000 per month, confirming that it is most likely a reversal of temporary jobs created for the annual festive season in December,” Kruger said.
With little indication of a notably different economic environment this year, the job market was likely to remain strained, as the main economic challenges prevailed.
The value of total take-home pay and private pension payments (less than R100k per month) processed by BankservAfrica in January this year increased by 7.9% in real terms, and by 15.3% in nominal terms, compared to a year earlier, not seasonally adjusted.
– BUSINESS REPORT
