Turns out SA has a robust and growing middle class despite concerns: study

-Study found an increase in new taxpayers in the middle income bracket

-Middle income earners have the power of choice

-Spike in car sales used as a barometer to determine middle class

It seems South Africa has a robust and growing middle class despite concerns about the economic impact of the COVID-19 pandemic.

That’s among the findings of BrandMapp, in a new study on the state of the middle class in the country. BrandMapp conducts an annual study of South African adults living in middle class and high income households.

According to Brandon de Kock, BrandMapp’s Director of Storytelling, its not all doom and gloom.

The study has found there are 12.5 million who live in households that earn more than R10,000 who form part of the so-called middle class.

As part of its study, BrandMapp has used Treasury’s tax base, which increased by 500,000 new taxpayers last year. The report found that personal tax income rose to R72 billion in 2021.

While there is no technical definition of the term ‘middle class’, de Kock has determined the middle class as "a group that has choices".

There’s a group of consumers that don’t have a choice as they’re struggling to put food on the table. Then there are consumers that have a choice. The moment you enter the tax bracket, then you have a choice. These are people driving the economy. They’re running the engines.

Brandon de Kock, BrandMapp’s Director of Storytelling

Data analysts have used new car sales as good barometer of the financial state and consumer power of the middle class.

If people are buying cars, it means the banks have the confidence to lend people money to buy cars. For the first quarter of 2022, for the first time we’re back to levels higher than 2019. Car sales are through the roof.

Brandon de Kock, BrandMapp’s Director of Storytelling

Treasury’s tax base indicates that the group who earn R30,000 a month and above has grown from 2.1 million to 2.5 million in three years.

Despite inflation and a rise in the cost of living expenses, de Kock believes the middle class may have less disposable income, but will not feel the financial squeeze.

If the price of fuel goes through the roof, these are people can afford to sit at home and run their businesses. This shows the level of choice. The real pain will be felt further down the realm.

Brandon de Kock, BrandMapp’s Director of Storytelling

According to de Kock, the explosive of e-commerce in South Africa during the COVID-19 pandemic and the thriving online shopping market is another indicator of the growing middle class.

Despite South Africa’s slow economic recovery post-COVID, de Kock believes the state of the economy requires a balanced "glass half-full" approach.

For every restaurant that closed down, there was a very happy corner cafe owner that tripled his turnover. Our food retailers have had the best two years of their lives. So there are two sides to the economy in this country.

Brandon de Kock, BrandMapp’s Director of Storytelling

Scroll up for the interview.

This article first appeared on CapeTalk : Turns out SA has a robust and growing middle class despite concerns: study

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