In some rare good news for retailers, including e-commerce companies, ahead of the Black Friday shopping period, BankservAfrica has said average take-home pay in South Africa reached a record level in September.
Helped by declining inflation, falling fuel prices and lower interest rates, the average salary surpassed R17 000 in September, the highest level since the inception of the BankservAfrica Take-home Pay series.
“Recent developments in the economy have given a boost to salary earners and could potentially spill over into the upcoming busy shopping period,” BankservAfrica said in a statement on Wednesday.
“The average nominal take-home pay reached R17 171, while in real terms salaries adjusted for inflation tracked higher at R14 969, improving by 5.6% year on year,” said Shergeran Naidoo, BankservAfrica head of stakeholder engagements.
Real take-home pay has risen by 2.2% in the first nine months of 2024 compared to the full-year average in 2023. In nominal terms, this has climbed by 6.3%, Naidoo said.
“The suspension of load shedding for almost seven months, significant easing of inflation, the new political landscape and the first interest rate cuts since March 2020 have provided a much-needed boost to confidence,” said Elize Kruger, an independent economist.
Two halves
BankservAfrica pointed at that although estimates point to an average salary increase of around 6% in 2024, the latest data in Statistics South Africa’s Quarterly Employment Statistics bulletin suggest a somewhat lower average increase for the first six months of the year.
The nominal increase in average monthly earnings in the formal non-agricultural sector, including overtime and bonuses, was 4.7% in the first half, per Stats SA. However, notable differences are evident, said BankservAfrica. “The transport (7%) and finance (6.6%) sectors recorded the highest increases in the first six months of 2024, unlike community and social services (2.3%) and manufacturing (3%).”
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“Overall, with 2024 being a year of two distinct halves, the higher levels of economic growth forecasts for the second half of the year could trigger a further uptick in salaries in more sectors towards year-end,” said Kruger.
The Take-home Pay series and industry indications suggest that 2024 could be the best year for salaries since 2020, said BankservAfrica.
“This improvement in purchasing power will provide much-needed relief to cash-strapped households and could, in combination with fuel price relief and lower interest rates, support consumer spending in the latter part of the year. Black Friday sales are also likely to benefit from the anticipated improvement in household finances,” said Kruger. – © 2024 NewsCentral Media
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