October shows South Africans took home a better salary

South Africans took home a better salary during October 2022, according to the BankservAfrica Take-home Pay Index (BTPI), reaching the highest level since February 2022.

The average nominal South African salary (after deductions), recovered to R15 489 in October, compared to a revised R15 094 in September 2022.

BankserAfrica has said that this was an achievement to be celebrated considering the fact that the country was facing a host of negative factors including load shedding, strike action and the hiked repo rate which were severely impacting the economy.

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Though still lower than the 2022 high of R15 670 reached in February, the BTPI moved into positive territory compared to a year ago, with annual growth of 2% (following five consecutive months of declines).

Salaries still lagging behind inflation hikes

But, BankservAfrica revealed that salaries were still lagging compared to headline inflation.

“This is reflected in a 5.1% y/y decline in the real average salary recorded in October, though somewhat of a moderation compared to the decline of 8.3% in September,” a statement from the institution read.

“While consumer inflation moderated slightly off its 13-year high of 7.8% reached in July (in line with our expectations), the 7.6% CPI recorded for October suggests that inflation remains quite sticky at elevated levels.”

BankservAfrica said that it still does, however, remain of the view that July’s headline CPI print at 7.8% would have been the upper turning point of the current inflation cycle and that pressures should start to alleviate slightly as inflation moderates towards year-end.

“We forecast that inflation could be around 7.2% by year-end,” they said.

Domestic pressures continue to mount

BankservAfrica also noted that the job losses as suggested by the latest data, which occurred in October as a result of the economy buckling under domestic pressures.

The institution noted that this was the second consecutive month in which fewer salaries were paid through BankservAfrica, after five consecutive months of job creation (April to August).

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Meanwhile, after one month of dipping below the R10 000-level, the BankservAfrica Private Pensions Index (BPPI) recovered somewhat in October and reached a nominal average of R10 102, up by 1.7% compared to September’s R9 938.