Continued Growth in Wage Rates

Continued Growth in Wage Rates

Figures released from Statistics New Zealand's Labour Cost Index (LCI) and Quarterly Employment Survey (QES) continue to show strong growth in salary and wage rates, accompanied by continued growth in demand for labour.

Salary and wage rates (including overtime), as measured by the LCI, showed the largest annual increase since the September 1997 quarter, rising 2.4 percent in the year to December 2003. Salary and wage rates (including overtime) rose 0.6 percent from the September 2003 quarter.

Public sector salary and wage rates (including overtime) recorded an annual rise of 2.8 percent in the December 2003 quarter, while the private sector rose 2.2 percent. Public sector salary and wage rates have recorded consistently higher annual wage growth than the private sector for the past two years.

The salary and wages for skilled tradespeople have shown strong growth in the current quarter, with the index for all trades workers rising 0.8 percent quarterly and 2.8 percent annually. Within this group, carpenters and joiners recorded a 4.3 percent rise in the year to December 2003.

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 results for the December 2003 quarter showed a continuing growth in demand for labour, and in earnings. Employment (full-time equivalent) growth was significant compared with the previous quarter and also with the same quarter last year. The survey results showed significant increases in earnings and paid hours in the December 2003 quarter and also in the year to December 2003.

Full-time employment in the December 2003 quarter rose by 3.1 percent compared with the previous quarter. The manufacturing industry was the main contributor to the increase in full-time employment. Part-time employment increased by 1.8 percent compared with the previous quarter.

The increase in part-time employment was mainly in the transport, storage and communication; construction; and accommodation, cafes and restaurants industries. Employment growth is higher in December quarters, compared with other quarters, due to seasonal factors.

The public and private sectors both experienced a significant increase in average hourly earnings, compared with the previous quarter.

Brian Pink

Government Statistician

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