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News24
25-06-2025
- Business
- News24
South Africans feel the pinch as take-home pay drops again
South Africans' real take-home pay declined by 1.1% in May from the previous month, according to BankservAfrica. The drop marked the third consecutive monthly decline in consumer salaries, reflecting the strain of a sluggish local economy and mounting global volatility, the Johannesburg-based lender said in a statement on Wednesday. Its data tracks about 3.8 million salary earners in South Africa. Real take-home pay totalled R14 832 in May, compared with R15 003 the month before, BankservAfrica said in a statement. The gauge has yet to recover to a record R16 368 set in February 2021 in the aftermath of the Covid-19 pandemic, its data showed. The month-on-month decline came despite a 5.8% year-on-year increase in average take-home pay, which continues to support household purchasing power, the bank said. However, stagnant economic growth in early 2025 and persistent global headwinds are weighing on momentum. 'The upward trend in take-home pay from mid-2024 to early 2025 has been a positive development after some years of dismal growth,' said independent economist Elize Kruger. 'However, recent months reflect a U-turn, with 2025 proving to be a volatile year so far.' Downward revisions to both domestic and global growth are weighing on confidence and delaying investment decisions, which are hampering economic activity, BankservAfrica said. Until clearer signals emerge, both households and investors are expected to tighten their belts, Kruger said.
The Citizen
25-06-2025
- Business
- The Citizen
Take-home pay slides for third month with grim job opportunities and earnings
Are you earning the average take-home pay of R17 296 and is it enough to cover all your expenses or are you affected when it decreases? The average take-home pay slowed for the third consecutive month in May, reflecting the impact of a subdued economic environment with stalled growth in the first quarter and a weakening global outlook, currently fuelled by the heightened volatility in the Middle East. According to the latest BankservAfrica Take-home Pay Index (BTPI), which tracks approximately 3.8 million salary earners in South Africa, the nominal average take-home pay decreased to R17 296 in May, 1.3% lower than the R17 532 registered in April, Shergeran Naidoo, BankservAfrica's head of stakeholder engagements, says. However, this figure remained significantly higher than the R15 903 recorded in May 2024. 'The upward trend in take-home pay from mid-2024 to early 2025 has been a positive development. However, recent months reflect a U-turn, with 2025 proving to be a volatile year so far, marked by multiple global shocks accompanied by a good dose of local challenges,' Elize Kruger, an independent economist, says. 'Downward revisions to global as well as local economic growth prospects have lowered confidence levels and put a pause on investment decisions, as investors and households hold back on their spending decisions. Together, these could hurt employment and earnings prospects of salary earners in the coming months.' ALSO READ: Capitec CEO tops banking pay charts — but how do staff salaries compare? A look at how SA's top five banks pay Quarterly Employment Statistics show average take-home pay of R28 289 According to the Quarterly Employment Statistics for the first quarter of 2025, the average monthly earnings paid to employees decreased by 0.1% from R28 316 in November 2024 to R28 289 in February 2025. According to the BTPI, take-home pay, adjusted for inflation, increased by 1.1% in May to R14 832 compared to R15 003 in April, but remained 5.8% higher than year-ago levels. 'The significant moderation in consumer inflation continues to have a positive impact on salary earners and their purchasing power, with the latest headline inflation figure for May 2025 at only 2.8%. 'However, the recent spike in international oil prices, due to the escalating conflict in the Middle East, could result in higher-than-expected headline inflation in the coming months and into 2026, Kruger says. She points out that the international Brent Crude Oil price increased to around $78/barrel after the US's attack on Iran's nuclear facilities, but talks about a ceasefire quickly triggering a reversal with oil prices dipping below $70/barrel again. 'Against expectations and despite the global volatility, the rand exchange rate remained notably resilient, providing a marginal offset of the higher oil prices on fuel price expectations. With the daily under-recovery at pumps running between R1.50/l for petrol grades and R2.70/l for diesel in recent days, it is clear that economic pain is on the radar for salary earners and the economy at large.' ALSO READ: Take-home pay increases significantly in 2024 Petrol increases coming that will affect take-home pay Kruger points out that petrol prices are forecast to increase by about R1/l and the prices for diesel by R1.30/l on 2 July, and further increases could be expected in August. 'These will push headline inflation upwards towards 5% by year-end, ahead of the 3.6% forecast for 2025. 'Concerningly, with the higher base calculation of 2025, the forecast average headline inflation for 2026 could be well above 4.5%, eroding the positive effects of lower inflation and likely triggering more conservatism from the South African Reserve Bank (Sarb). 'Any further monetary loosening looks unlikely at this stage, considering that the Middle East conflict is intensifying and the resultant negative impact on local fuel prices. Still, despite the negative developments outlined, 2025 is expected to be the second consecutive year of positive real take-home pay growth, supporting demand in the economy.' ALSO READ: Salary survey shows gap between increases and inflation narrowing Remchannel survey shows average salary increased by 5.82% in 2025 Meanwhile, the Remchannel Salary and Wage Movement Survey, a biannual report by Old Mutual published in April 2025, indicated that the average salary increased by 5.82% in 2025, compared to 6.09% in the previous year. Kruger says this trend suggests a more cautious approach by employers, who must also prioritise cost control amid a constrained economic environment. Interestingly, she says, the report revealed a reduced overall staff turnover rate of 13.5%, reflecting a market with fewer new job opportunities due to widespread downsizing by companies. She emphasises that this data confirms the financial pressures employees live with, as 39% of those who resigned were seeking better pay and career growth, while 31% left due to dissatisfaction with their current roles. 'With the local economy stalling in the first quarter and the weakening global backdrop adding to the downside scenario, the prospects of favourable earnings and employment opportunities have dimmed. ALSO READ: Salaries decreased by 2% in April, but higher than a year ago Policies must foster rather than deter employment in SA 'The latest Quarterly Employment Statistics survey released by Statistics SA indicated that total employment in the formal non-agricultural sector decreased by 74 000 in the first quarter of 2025, with employment falling from 10.65 million people in December 2024 to 10.58 million people by March 2025. 'According to the survey, 95 000 jobs were lost between March 2024 and March 2025. The Labour Force Survey, which also included the informal sector, agricultural sector and employment in households, echoed the pressure, showing that the unemployment rate ticked higher to 32.9% in the first quarter, with 291 000 job opportunities lost. 'The unemployment situation in South Africa remains a crisis and deserves to be one of the top priorities of government. It is imperative that government pushes forward on structural reforms across sectors such as energy and logistics. 'This could contribute towards solving our local predicaments, lifting the local economy's medium-term growth potential, but government must also ensure that policies and laws will foster rather than deter employment in South Africa.'
IOL News
25-06-2025
- Business
- IOL News
Take-home pay slides for the third month as job opportunities and earnings outlook remain grim
The nominal average take-home pay declined to R17 296 in May, 1.3% lower than the previous month as job opportunities and earnings outlook remain grim. Image: File The nominal average take-home pay declined to R17 296 in May, 1.3% lower than the previous month as job opportunities and earnings outlook remain grim, according to the latest BankservAfrica Take-home Pay Index (BTPI). The index tracks approximately 3.8 million salary earners in South Africa. However, this figure remained significantly higher than the R15 903 recorded in May 2024. This was third consecutive month that take-home pay slowed reflecting the impact of a subdued economic environment with stalled growth in quarter and a weakening global outlook, currently fuelled by the heightened volatility in the Middle East. Elize Kruger, an independent economist, said, 'The upward trend in take-home pay from mid-2024 to early 2025 has been a positive development. However, recent months reflect a U-turn, with 2025 proving to be a volatile year so far – marked by multiple global shocks accompanied by a good dose of local challenges." BankservAfrica said downward revisions to both global and local economic growth prospects have lowered confidence levels and put a pause on investment decisions, as both investors and households hold back on their spending decisions. Together, these could hurt employment and earnings prospects of salary earners in the coming months. In real terms, take-home pay, adjusted for inflation, moderated by 1.1% month-on-month to R14 832 in May 2025, compared to R15 003 in April, but remained 5.8% higher on year-ago levels. The significant moderation in consumer inflation continues to have a positive impact on salary earners and their purchasing power with the latest headline CPI figure for May 2025 at only 2.8%. However, the recent spike in international oil prices - due to the escalating conflict in the Middle East - could result in higher-than-expected headline CPI in the coming months and into 2026. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Petrol and diesel prices are forecast to increase by about R1/l and R1.30/l, respectively on July 2, and further increases could be expected in August. These will push headline CPI upwards towards 5% by year-end, ahead of the 3.6% forecast for 2025. Concerningly, with the higher base calculation of 2025, the forecast average headline CPI for 2026 could be well above 4.5%, eroding the positive effects of lower inflation and likely triggering more conservatism from the South African Reserve Bank. 'Any further monetary loosening looks unlikely at this stage, in light of the intensifying Middle East conflict and the resultant negative impact on local fuel prices. Still, despite the negative developments outlined, 2025 is expected to be the second consecutive year of positive real take-home pay growth, supporting demand in the economy,' says Kruger. Meanwhile, The Remchannel Salary and Wage Movement Survey, a biannual report by Old Mutual published in April 2025, indicated the average salary increased by 5.82% in 2025, compared to 6.09% in the previous year. This trend suggests a more cautious approach by employers, who must also prioritise cost control amidst a constrained economic environment. BankservAfrica said interestingly, the report revealed a reduced overall staff turnover rate of 13.5%, reflecting a market with fewer new job opportunities due to widespread downsizing by companies. This data confirms the financial pressures employees are under, as 39% of those who resigned were seeking better pay and career growth, while 31% left due to dissatisfaction with their current roles. BUSINESS REPORT Visit:
The Citizen
11-06-2025
- Business
- The Citizen
Economic activity picked up for the first time in 8 months in May
It is good news, but there are still many risks that could bring the economic activity down again. Economic transactions picked up in May for the first time in eight months, bringing some relief after months of stagnation. A part of May's improvement stems from wiping out the weakness evident in the index in April. According to the BankservAfrica Economic Transactions Index (BETI), which measures the value of all electronic transactions cleared through BankservAfrica on a monthly basis at seasonally adjusted real prices, economic activity rebounded in May, although it is too early to tell if this positive trend will hold. Shergeran Naidoo, head of stakeholder engagements at BankservAfrica, says the BETI improved to an index level of 138.3 in May, up from the 136.2 recorded in April, breaking an eight-month trend of sideways movement. Despite the shift, notable risks remain, and more evidence of sustained higher economic activity must be delivered before the narrative of a subdued growth environment can change. 'The number of transactions cleared through BankservAfrica in May reached an all-time high of 176.3 million compared to 167.9 million in April, surpassing the previous record of 172.4 million in March 2025.' ALSO READ: Economic activity in SA struggling to gain momentum Too early to call a change in the trend for economic activity Elize Kruger, an independent economist, says while the latest figure is encouraging, it is too early to call an imminent change in trend as the economic environment has not changed materially in May, and notable risks remain. 'In addition, the recovery in economic activity in May followed the month of April when the world was hit by the US announcement of punitive import tariffs, and subsequently an evolving trade war developed with a great deal of volatility from day to day as markets plummeted and global and local growth forecasts were slashed. 'Confidence levels across the globe and in South Africa were knocked by the sheer uncertainty that these developments brought. 'However, with some tariffs put on ice and several countries entering, more favourable trade agreements, averting a worst-case scenario. Markets responded with relief rallies and a cautious return of confidence, albeit from a low base.' However, she says, the BETI is still 1.4% higher, and the uptick remains encouraging as all of its components increased in value terms during May. 'The most notable performances were the heavily weighted EFT credits, Real Time Clearing and PayShap transactions. 'The standardised nominal value of transactions also increased to R1.351 trillion in May compared to R1.320 trillion in April, with the resultant average value per transaction covered in the BETI increasing to R7 618, higher than April's R7 485. 'All payment streams increased in both volume and value terms during May.' ALSO READ: Economic activity still moving sideways but optimism increases Two PMIs and new car sales also added to increased economic activity Kruger says two other timeous economic indicators also posted stronger readings. The S&P Global South Africa Purchasing Managers' Index increased to 50.8 in May, driven by the sharpest uplift in private sector output in four years. Naamsa also reported that the strong momentum in the local vehicle sales market continued into May 2025. Total vehicle sales increased by 22%, with year-to-date sales up by 12.6% compared to the same period a year earlier. New car sales surged by an impressive 30%, while year-to-date, sales were a notable 21.2% higher. On the other hand, she points out that the seasonally adjusted Absa Purchasing Managers' Index (PMI), reflecting on prospects in the manufacturing sector, remained in contractionary territory for a seventh consecutive month at 43.1 index points. 'Furthermore, the BETI rebound is a timely development, given that the economy started 2025 on the backfoot as seasonally adjusted quarterly growth of only 0.1% was registered in the first quarter with sectors such as mining, manufacturing and construction now in technical recession.' says Kruger. ALSO READ: Structural reform is silver bullet needed for SA economy to grow – OECD Economic growth adjusted downward, but inflation stays low While economic growth forecasts for 2025 have been revised downward, with the latest Reuters consensus among economists now projecting real gross domestic product (GDP) growth at 1.2%, down from 1.7% in January. Carpe Diem Research offers an even more cautious outlook, forecasting growth at just 1.0%. On the more positive side, Kruger says local inflation remains well under control, with headline inflation at 2.8% in April, below the target band of the South African Reserve Bank (SARB) of between 3-6%, with the average 2025 forecast around 3.4%. 'The favourable inflation environment created ample scope for the Sarb to cut interest rates. Even after a 25 basis points cut in May, the repo rate remains quite high at 7.25%, as real interest rates are still considered punitive for an economy muddling along, unable to gain meaningful momentum.' Kruger also points out that, helped by some weakness in the US dollar, the rand exchange rate recovered all of its losses after the US 'Liberation Day' announcements and trading at fairly strong levels. 'The low inflation rate will play a key role in supporting the recovery of salary earners' purchasing power. With average salary increases expected to be between 5% and 6%, 2025 will be the second consecutive year of real increases in salaries, which should support consumer spending.'
Zawya
29-05-2025
- Business
- Zawya
South Africa GDP growth outlook gets biggest cut since early 2023
Economists have cut their consensus forecast for South African economic growth this year by 0.3 percentage points in May, in the biggest single monthly downgrade since early 2023, a poll showed on Tuesday, as they factor in the impact of US tariffs. The last time growth forecasts got a similar trim was in early 2023 due to power shortages. A median forecast of 26 economists surveyed May 22-27 suggested growth would be 1.2% this year. Last month, the forecast was reduced to 1.5% from 1.7%. For next year, it was shaved by 0.2 percentage points compared with last month's poll to 1.6%. "I have sliced 0.5 percentage point off my earlier forecast for GDP growth of 1.5%," said independent economist Elize Kruger. "The bigger negative impact on South Africa will likely emerge from the indirect effect of the trade war on the global economy at large, and specifically on South Africa's major trading partners." Tariffs, rates, pressure US President Donald Trump proposed a 31% tariff on South Africa in early April, which as with other countries was put on pause for 90 days. While the direct impact of tariffs is likely limited to around 8% of total exports, some sectors will feel the impact more severely, particularly those that enjoyed duty-free access under the African Growth and Opportunity Act, added Kruger. The South African Reserve Bank, meanwhile, was expected to cut its benchmark repo rate by 25 basis points to 7.25% on Thursday as inflation is well below the midpoint of the central bank's target range. But there has been no major change to the rate outlook over the past month. The central bank is expected to hold rates at 7.25% until a 25 bps cut in November. Last month the second cut was expected early next year. Fifteen of 25 economists expect the repo rate to be eased by a quarter of a percent this week. Nine expect rates to be held steady at 7.50% while one expects rates to be cut 50 basis points. Inflation as measured by the change in the consumer price index is expected to average 3.5% this year, quickening to 4.2% next year and 4.4% in 2027, but still below the midpoint of the Bank's 3%-6% target. In March, the central bank kept its repo rate unchanged after three consecutive cuts, citing risks from Trump's global trade war and local budget disagreements. Inflation target unclear Still, inflation was recorded at 2.8% in April and the survey suggests it will average 2.9% this quarter. It is then expected to quicken close to the 4.5% midpoint of the target in coming quarters but still remain below that in two years. In Cape Town last week in parliament, National Treasury made only minor adjustments to its spending plans and deficit projections in a budget presented for a third time due to disagreements within the ruling coalition that derailed two previous versions. Michael Kafe, economist at Barclays, wrote the Sarb has room to cut 25bps given no CPI target change, contrary to indications by the deputy finance minister on 15 May that an announcement on the country's inflation target would be made very soon. "The 2025 Budget that was presented on 21 May did not even contain the words 'inflation target', leaving scope for the Sarb to ease policy further at the upcoming 29 May MPC meeting," added Kafe. Some economists still say this announcement is imminent. If it happens, that alone could lead to a downward revision of inflation expectations across all horizons, wrote Reza Ismail, head of bonds at Prescient Investment Management.
