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Growth in the Demand for Labour and in Wages


Growth in the Demand for Labour and in Wages

Annual growth in both the demand for labour and in wages are continuing, according to figures released from Statistics New Zealand's Quarterly Employment Survey (QES) and Labour Cost Index (LCI).

QES results for the year to February 2003 show a continuation of growth in businesses' demand for labour and in resulting earnings, with annual increases in total gross earnings (up 6.6 percent), total paid hours (up 4.2 percent) and filled jobs (up 3.2 percent).

The February 2003 quarterly results show little change in full-time equivalent employees (FTEs) and filled jobs, but increases in total paid hours and total gross earnings of 1.1 percent and 1.2 percent respectively. These movements are consistent with historical and seasonal patterns. On an annual basis, the number of FTEs increased by 3.4 percent for the year to February 2003.

Salary and wage rates (including overtime), as measured by the LCI, rose by 0.6 percent in the March 2003 quarter, following an increase of 0.5 percent in the December 2002 quarter. On an annual basis, salary and wage rates (including overtime) were 2.3 percent higher in the March 2003 quarter than in the March 2002 quarter. This is the largest annual increase since the September 1997 quarter.

The growth in private sector pay rates in the latest quarter is similar to that recorded in recent quarters, while the growth in public sector pay rates is weaker compared with the previous two quarters. LCI private sector salary and wage rates (including overtime) rose by 0.6 percent in the March 2003 quarter, following a rise of 0.5 percent in the December 2002 quarter. Private sector salary and wage rates (including overtime) were 2.2 percent higher than in the March 2002 quarter.

Public sector salary and wage rates (including overtime) rose 0.6 percent in the March 2003 quarter following consecutive rises of 0.8 percent in the December 2002 and September 2002 quarters. On an annual basis public sector salary and wage rates (including overtime) were 2.6 percent higher than in the March 2002 quarter. Large contributions to the latest annual increase came from teaching professionals (up 3.2 percent) and health professionals (up 2.9 percent).

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.

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.

The QES average total hourly earnings were $19.20 in the February 2003 quarter. The quarterly movement (an increase of 0.1 percent) was not statistically significant. In the year to February 2003, average total hourly earnings rose by 2.3 percent, which is less than the annual movement in the November 2002 quarter.

Brian Pink

Government Statistician


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