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Growth in Wage Rates Continues


Growth in Wage Rates Continues

Figures released from Statistics New Zealand's Labour Cost Index (LCI) and Quarterly Employment Survey (QES) show further growth in wages and the demand for labour in the December 2002 quarter.

Salary and wage rates (including overtime), as measured by the LCI, rose by 0.5 percent in the December 2002 quarter, following an increase of 0.7 percent in the September 2002 quarter. On an annual basis, salary and wage rates (including overtime) were 2.1 percent higher in the December 2002 quarter than in the December 2001 quarter.

There has been relatively strong growth in public sector pay rates and weaker, relatively steady growth in private sector pay rates. LCI public sector salary and wage rates (including overtime) recorded strong growth for the second consecutive quarter, rising by 0.8 percent in the December 2002 quarter, following a rise of the same magnitude in the September 2002 quarter. On an annual basis, public sector salary and wage rates (including overtime) were 2.6 percent higher than in the December 2001 quarter. Within the public sector, there were annual increases of 3.2 percent for health professionals (including an increase of 0.7 percent in the latest quarter) and 2.8 percent for teaching professionals (including an increase of 1.3 percent in the latest quarter).

LCI private sector salary and wage rates (including overtime) rose by 0.5 percent in the December 2002 quarter, following a rise of 0.6 percent in the September 2002 quarter. Private sector salary and wage rates (including overtime) were 2.0 percent higher than in the December 2001 quarter.

The private sector construction industry recorded an annual increase of 2.3 percent with strong growth of 0.8 percent in each of the latest two quarters. There has not been a larger annual increase for construction since 1996, which is consistent with a high level of construction activity in 2002 and reports of labour shortages.

Survey respondents reported that one in three increases in ordinary time pay rates during the past year was to match market rates, retain staff or attract staff. However, three in five pay-rate increases of more than 5 percent were for these reasons, compared with one in five for increases of up to 2 percent.

The LCI measures changes in salary and wage rates for a fixed quantity and quality of labour input. By comparison, QES average earnings statistics reflect not only changes in pay rates, but also compositional and other changes in the paid workforce.

Quarterly Employment Survey (QES) results for the year to November 2002 show a continuation of growth in businesses' demand for labour and in resulting earnings, with increases in total gross earnings, total paid hours and filled jobs.

Annually, the number of full-time equivalent employees increased by 3.6 percent and filled jobs increased by 3.0 percent. Seasonally adjusted total paid hours increased by 0.4 percent in the November 2002 quarter and 3.9 percent in the year to November 2002. Seasonally adjusted total gross earnings rose by 1.7 percent in the November 2002 quarter and 7.7 percent in the year to November 2002.

In the November 2002 quarter, the QES recorded a 0.7 percent increase in average total hourly earnings. This follows an increase of 1.8 percent in average total hourly earnings in the August 2002 quarter. In the year to November 2002, average total hourly earnings increased by 3.6 percent.

Brian Pink

Government Statistician


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