Annual wage rate growth at 3.6 percent

The Labour Cost Index (LCI) recorded an increase of 3.6 percent in salary and wage rates (including overtime) in the year to the September 2008 quarter, Statistics New Zealand said today. This is the largest annual increase recorded since the series began in the December 1992 quarter.

The Quarterly Employment Survey (QES) results for the September 2008 quarter show the annual increase in total gross earnings continued to exceed the annual increase in total paid hours. This resulted in a 5.5 percent increase in average total hourly earnings, to $24.37.

The LCI increase for the September 2008 quarter was 1.1 percent, up from increases of 0.8 percent and 0.7 percent in the June 2008 and March 2008 quarters, respectively. The latest quarterly increase matches the record quarterly increase of 1.1 percent recorded in the December 2007 quarter.

For all surveyed salary and ordinary time wage rates that rose in the year to the September 2008 quarter, the mean increase was 6.1 percent. This compares with a mean increase of 5.8 percent in the year to the June 2008 quarter, and is the largest annual mean increase since the series began.

QES results show that while annual earnings growth remained strong, the growth in demand for labour slowed. Total gross earnings increased 7.0 percent for the September 2008 year. Employment as measured by full-time equivalent employees (FTEs) increased 1.6 percent for the year to September 2008. This is the smallest annual increase in FTEs since March 2007.