ALTHOUGH South African consumers had some financial relief over December as their take-home pay was higher than a year ago, indications are that the increase in disposable income will once again be slower than inflation for the rest of the year.
This was the findings of the BankservAfrica Disposable Salary Index (BDSI), which simply means higher prices, with less money to pay the bills.
BankservAfrica chief executive of regulated projects Brad Gillis said South African take-home salaries averaged R11641 in February 2014, which was 6.4% higher than a year ago. However, in real terms, take-home pay increased by only 0.5% in December year-on-year.
“The January 2014 change is the lowest increase in both real and nominal terms in seven months, and February remained flat. It does therefore seem that South Africans with formal sector jobs have, in general, received take-home pay increases above the rate of official inflation, although the rate of real increases is fast declining. It is quite possible that South African disposable salaries will again dip below the rate of inflation,” Gillis explains.
In December 2013, the average disposable salary payment was an unadjusted R12834, which was only 2.3% up when compared to December 2012.
Economist Mike Schussler said at least part of the slowdown in increases was probably due to lower bonus payments as sales or production targets were not made.
“It is also likely that bonus payments could have been lower or, in some cases, delayed into January. However, one suspects that the chances of high take-home pay increases are quite slim for 2014, as many people are pointing out that the economy is struggling with capacity constraints and disruptions such as strikes,” Schussler said.
The median monthly salary remained between R8000 and R9000 in January. An estimated 30% of all employees get to take home the average salary amount of R11923. – Business Reporter