Independent Online

Monday, May 23, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Retail sales may decline in the next months

With salaries coming under greater pressure from the higher inflation rate, overall retail sales may show a declining or slowing trend in the next month or two (AP Photo/Tomas Munita)

With salaries coming under greater pressure from the higher inflation rate, overall retail sales may show a declining or slowing trend in the next month or two (AP Photo/Tomas Munita)

Published May 2, 2022

Share

WITH salaries coming under greater pressure from the higher inflation rate, overall retail sales may show a declining or slowing trend in the next month or two, says Economists.co.za. Chief Economist Mike Schüssler.

The automated payments clearing house the BankservAfrica Take Home Pay Index (BTPI) showed that while salary numbers were still looking positive in March 2022 as the total take-home pay and private pensions processed in value terms declined by 1.3 percent in real terms but increased by 4.5 percent in nominal terms.

Story continues below Advertisement

The financial institution said that the real average South African salary fell below the R15 000 mark in March 2022 and recording one of the biggest annual falls on record of 5.6 percent.

BankservAfrica’s Head of Stakeholder Engagements Shergeran Naidoo said the average real salary was R14 969 in March, falling below the R15 000+ mark seen in the previous months. “The real BTPI annual decline of 5.6 percent is one of the biggest annual falls on record.”

The average nominal salary was R15 121 in March, nearly R1 000 lower than the record R16 022 registered in February. In 2021 terms, the average take-home pay was R14 969. The March numbers were usually lower as the year-end bonus pay-outs fall out of the index’s smoothing.

Story continues below Advertisement

“But the average decline, shown in the BankservAfrica Take Home Pay Index (BTPI), hides the fact that more people are receiving salaries compared to a year ago. The end of the national State of Disaster has also resulted in more people rejoining the workforce,” reads the index report.

Economists.co.za. Chief Economist Mike Schüssler said that overall, the total number of people paid via BankservAfrica was very close to reaching the 2019 levels, after already having exceeded the 2020 numbers.

With that being said, the average take-home pay was said to be under pressure from the higher inflation rate. The clearing house’s data was said to also suggest that employees returning to work were likely to be from the lower-paying sectors.

Story continues below Advertisement

Describing this movement which was described as odd, BankservAfrica said that the very fact that the monthly estimate of employment numbers was up on a year ago suggested the return of casual and weekly workers. It said that the most vulnerable sectors in the Covid-19 pandemic, such as tourism and entertainment, were making a comeback. ”Additionally, the increase in monthly pay cheques shows firms are hiring people-particularly people from the lower end of the salary scale–for new employment opportunities.”

The thinking behind this stemmed from the odd movement between the increasing number of monthly paid employees despite the significant average take-home pay declines. In the current economic context, the clearing house said that it could deduce that this pattern had emerged from the employment growth within a specific sector or the expanding pool of younger, inexperienced employees in the overall economy.

“Overall, the total number of people paid via BankservAfrica has exceeded the 2020 numbers and is very close to reaching the 2019 levels. Although this is an estimation, the trend appears positive for the number of people employed.”

Story continues below Advertisement

Meanwhile, the average private pension dipped in real terms for the second time in 20 months. The BankservAfrica Private Pensions Index (BPPI) showed that the average real private pension declined by 0.1 percent on a year-on-year basis. “In real terms, the average real private pension was R9 475,” Naidoo said.

BUSINESS REPORT

Related Topics:

Free Market Economy

Share