Shergeran Naidoo, head of stakeholder engagements at BankservAfrica, pointed to a second consecutive month that nominal salaries have remained below the R15,000 mark and 1.8% lower compared to a year ago.<\/p>\n
The last time the nominal average take-home pay was this low was in July 2021, BankservAfrica data shows. The firm anoted that in four of the past seven months, there has been negative year-on-year growth for nominal wages.<\/p>\n
The graph below illustrates the monthly take-home pay steadily decreasing over a year and a half:<\/p>\n
Stagnant take-home pay is bad news for consumers who are already constrained by inflationary pressures.<\/p>\n StatsSA reported earlier in July that consumer inflation has accelerated to the highest rate in over a decade, with headline inflation at 7.4% y\/y in June – the highest since 2009.<\/p>\n Absa in its latest third Quarterly Perspectives report said that CPI could peak at 7.9% in October, remaining above the upper 6% bound of the target range until mid-2023 and the 4.5% midpoint until 2024.<\/p>\n “Our relatively bullish oil price assumption leaves some downside risk to our CPI forecast, but like the SARB, we see the balance of inflation risks lying to the upside,” it said.<\/p>\n Inflationary pressure is being driven by higher fuel prices, which has had knock-on effects on the transport sector and food prices.<\/p>\n These rising costs have been exacerbated by higher charges for electricity, which came into effect in July for municipal customers.<\/p>\n Food\u00a0<\/strong><\/p>\n The price of consumer goods across the country has seen dramatic increases, with one of the most tangible being the rising price of groceries.<\/p>\n The Household Affordability Index<\/a>\u00a0<\/strong>by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) for June 2022 shows that a basket of groceries has increased by almost 14% over the last year.<\/p>\n The index tracks the average price of a household food basket made up of common products over time.<\/p>\n The group reported that the household food basket currently costs R4,688, up R560 (+13.6%) from the year before. Products that saw the highest increase in price included cooking oil, spinach, cake flour and chicken livers.<\/p>\n The below graph shows the Household Affordability Index over a year and a half:<\/p>\n StatsSA reported that food and non-alcoholic beverages inflation continued to accelerate, posting 1.2% m\/m and 8.6% y\/y over June 2022.<\/p>\n Transport<\/strong><\/p>\n Despite reprieve on the horizon for motorists in terms of petrol price, overall transport costs continue to rise.<\/p>\n End of month data from the Central Energy Fund shows that the price of petrol could decrease for the first time in months, with the petrol price showing an over-recovery of 200 cents per litre and diesel showing a smaller over recovery of 160 cents per litre.<\/p>\n However, August will also see the end of the government’s fuel levy interventions, where 75 cents per litre will be added back into the price, giving a projection of a 125 cents per litre drop for petrol and an 85 cents per litre drop for diesel.<\/p>\n The Department of Mineral Resources and Energy confirmed that there will be a “sizeable” decrease in fuel prices in August, even with the removal of the interventions.<\/p>\n Even with a potential R1.25 drop in the price, however, fuel prices over the last 12 months would have increased by 45% year on year.<\/p>\n (Note: Petrol prices were sourced from the South African Petroleum Industry Association<\/a>)<\/em><\/p>\n Transport costs extend beyond the fuel price, however.<\/p>\n Naked Insurance recently presented data showing that consumers are in a ‘perfect storm’ of higher costs for car ownership, where car owners are paying higher interest rates on financed vehicles, the cost of servicing and maintaining a car has increased due to supply chain pressures, and deteriorating roads paired with load shedding are increasing the frequency of accidents.<\/p>\n The PMBEJD also tracks transport costs among low-income households, noting that taxi fares for a month of travel increased almost 7% year-on-year (June 2021 to June 2022).<\/p>\n These costs are now also expected to escalate even further, with taxi associations announcing in July that fares would have to be hiked by as much as 30%<\/a> to keep up with rising fuel prices and maintenance costs.<\/p>\n Electricity<\/strong><\/p>\n Beyond high transport costs, households are feeling the effect of municipal electricity tariff increases, said the Bureau for Economic Research (BER).<\/p>\n At the start of this month, major metros\u00a0 \u2013 including CapeTown, Johannesburg, and Durban \u2013 introduced an increase in municipal electricity tariffs after the national energy regulator Nersa approved a 7.47% hike.<\/p>\n The graph below compares the average price of 1kWh of electricity over the period of 10 years in cents:<\/p>\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2022\/07\/Nominal-Average-take-home-pay-over-time-e1658996841692.png\")
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