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Slower Growth in Demand for Labour

Slower Growth in Demand for Labour

Quarterly Employment Survey (QES) and Labour Cost Index (LCI) figures show slower employment growth, accompanied by steady growth in wage rates, according to Statistics New Zealand.

Increases in wage rates are now at their highest level for six years. Quarterly Employment Survey (QES) results for the year to May 2003 show a continued, albeit slower, growth in business demand for labour and in employee earnings.

In the year to May 2003, employment as measured by full-time equivalent employees (FTEs) increased by 2.2 percent, while total paid hours and total gross earnings rose by 2.5 percent and 6.3 percent respectively.

The number of full-time equivalent employees (FTEs) remained flat in the May 2003 quarter with no statistically significant movement. This compares with no statistically significant movement in the February 2003 quarter, but an increase of 2.4 percent in the November 2002 quarter.

Salary and wage rates (including overtime), as measured by the LCI, rose by 0.5 percent in the June 2003 quarter, following an increase of 0.6 percent in the March 2003 quarter.

On an annual basis, salary and wage rates (including overtime) were 2.3 percent higher in the June 2003 quarter than in the June 2002 quarter. This follows an annual increase of the same size in the March 2003 quarter, the highest annual increase since the September 1997 quarter, when an increase of 2.5 percent was recorded.

Public sector salary and wage rates (including overtime) rose 0.5 percent in the June 2003 quarter, and were 2.6 percent higher than in the June 2002 quarter. A large contribution to the annual rise came from increased salary and wage rates for public sector teaching professionals (up 4.2 percent).

Private sector salary and wage rates (including overtime) rose 0.5 percent in the June 2003 quarter and were 2.2 percent higher than in the June 2002 quarter. This follows annual increases of 2.2 and 2.0 percent for the March 2003 and December 2002 quarters, respectively.

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 continued comparatively higher annual increase in QES earnings relative to paid hours has led to an increase in average hourly earnings over the last year. The 3.7 percent annual increase follows on from relatively high annual movements evident in recent quarters. Average total hourly earnings increased by 1.1 percent to $19.41 in the May 2003 quarter. By comparison, there was no significant change in the February 2003 quarter, and a 0.7 percent increase in the November 2002 quarter.

Brian Pink

Government Statistician

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