Average salaries in South Africa declined last month as rising inflation, low business confidence levels and rolling power cuts continued to weigh on the labor market, a BankservAfrica report showed.
The average nominal monthly salary measured in the BankservAfrica Take-home Pay Index slipped 2.7% to 14,457 rand ($785) in May from the year before, while take-home pay adjusted for inflation fell 8.8% to a record low.
“An environment of such low confidence is not conducive to job creation or comfortable wage increases,” said Elize Kruger, an independent economist.
South African business confidence has slumped for five consecutive quarters and is at its lowest level since a lockdown instituted during the height of the Coronavirus pandemic, surveys conducted by Rand Merchant Bank and the Bureau for Economic Research show. The mood has been soured by the state power utility’s inability to meet electricity demand, which has resulted in a series of outages.
The country is also contending with a 33% unemployment rate and the nation’s economic outlook remains bleak.
“The job market and salary adjustments are likely to remain lackluster for the remainder of the year, a scenario that could only exacerbate the unemployment crisis,” Kruger said.
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