Strong annual wage growth recorded

The Labour Cost Index (LCI) recorded an increase of 3.4 percent in salary and wage rates (including overtime) in the year to the December 2007 quarter, Statistics New Zealand said today.

The Quarterly Employment Survey (QES) results for the same period show the annual increase in total gross earnings exceeded the annual increase in total paid hours. This resulted in a 4.1 percent increase in average total hourly earnings, to $23.32.

In the LCI, the 3.4 percent increase in salary and wage rates (including overtime) is the highest annual increase since the series began in the December 1992 quarter. Salary and wage rates (including overtime) recorded a 3.4 percent increase in the year to the December 2007 quarter for the private sector, while in the public sector they rose 3.1 percent.

Salary and wage rates (including overtime) increased 6.3 percent for the finance and insurance industry in the year to the December 2007 quarter, the largest annual increase since the series began in the June 2001 quarter. Finance and insurance salary and wage rates (including overtime) rose 3.6 percent in the December 2007 quarter. Matching market rates and collective employment agreements coming into effect were the main reasons for the increase this quarter.

Earnings growth was also evident in the QES, where seasonally adjusted total gross earnings increased 7.0 percent in the year to the December 2007 quarter. Employment, as measured by full-time equivalent employees (FTEs), increased 3.3 percent for the year to the December 2007 quarter.