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SA salaries growing ahead of inflation

Take-home pay up 8.9% year-on-year.

CAPE TOWN – The latest data from BankservAfrica indicates that South African salary earners are currently getting increases that outpace inflation. The BankservAfrica Disposable Salary Index (BDSI) shows that the average salary deposited into local bank accounts in February 2015 was R12 051, up from R11 067 a year ago. 

That represents a nominal increase of 8.9%. After inflation, the real increase in the average salary was 4.8%.

This is the sixth month in a row in which salaries have shown growth ahead of inflation. The real increase of 4.8% is also the strongest since October 2014.

BankservAfrica does however note that some of this increase may be artificial, as the platinum strike was under way in February last year, which could have depressed the numbers. Currently there are no major strikes taking place that might affect the data.

Nevertheless, with inflation at just 3.9% for February, South African salary earners should have more cash in their pockets, which will sustain consumer spending. This could have a positive effect on retail sales and other consumer-facing businesses.

At the same time, the BankservAfrica Private Pension Index shows that the average pension deposited into South African bank accounts is also growing ahead of inflation. From R5 060 in February 2014, the average pension was up to R5 557 last month.

While this is still less than half of the average salary, the gap declined slightly. Nominal growth in the average pension was 9.8% year-on-year, an above-inflation improvement of 5.7%.

This is the second month in a row in which pensions have grown ahead of salaries. Economists dotcoza suggest that this could be an indication that pensioners are getting some benefit from the strong bull market in equities over the last few years, which will have boosted investment returns. With changes to personal income tax rates, disposable pensions may catch up even more over the coming year.

Actual salaries and private pension bank account payments

Month

Nominal smoothed disposable salaries

Real disposable salaries

BankservAfrica private pension

Nominal BDSI % change year ago

Real BDSI % change YoY

14-Jan

11637

10968

5234

7.50%

1.60%

14-Feb

11067

10314

5060

7.80%

1.80%

14-Mar

10957

10080

5162

4.10%

-1.90%

14-Apr

11108

10172

5186

4.10%

-1.90%

14-May

12114

11074

5282

12.60%

5.60%

14-Jun

12269

11184

5295

15.20%

8.00%

14-Jul

12450

11257

5366

15.00%

8.10%

14-Aug

12224

11012

5380

6.10%

-0.30%

14-Sep

12278

11061

5402

7.90%

1.90%

14-Oct

12625

11353

5454

11.40%

5.20%

14-Nov

12394

11145

5690

8.30%

2.40%

14-Dec

12674

11418

5722

8.80%

3.30%

15-Jan

12286

11088

5735

5.60%

1.10%

15-Feb

12051

10808

5557

8.90%

4.80%

Source: BankservAfrica and Economists dotcoza

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