Wage rates grow 1.9 percent

Salary and wage rates, which include overtime, increased 1.9 percent in the year to the March 2011 quarter, Statistics New Zealand said today. This increase in the labour cost index (LCI) follows a 1.7 percent increase in the year to the December 2010 quarter and a 1.6 percent increase in the year to the September 2010 quarter. Annual wage growth declined from a peak of 4.0 percent in the year to the September 2008 quarter to 1.5 percent in the year to the March 2010 quarter.

Salary and wage rates for the private sector increased 2.0 percent in the year to the March 2011 quarter. This is the largest increase since a 2.0 percent increase in the year to the September 2009 quarter. Public sector rates increased 1.4 percent in the year to the March 2011 quarter, which is the same increase as for the year to the December 2010 quarter.

Annual wage growth was higher due to a higher proportion of wage rates increasing. The average size of increases remained about the same. Fifty-six percent of salary and ordinary time wage rates in the LCI sample rose in the year to the March 2011 quarter, up from 53 percent, 49 percent, and 46 percent in the years to the December, September, and June 2010 quarters.

The Quarterly Employment Survey (QES), also released today, showed that average total hourly earnings continued to rise. In the March 2011 year, average total hourly earnings increased 2.6 percent, which is up from a 1.9 percent increase in the December 2010 year.

For the same period, average total weekly paid hours for full-time equivalent employees increased 1.4 percent to 38.43 hours. This is the second-largest increase since the series began in March 1989.

The Christchurch earthquake on 22 February 2011 did not affect the LCI or QES estimates for the March 2011 quarter as the reference week for both surveys was before the earthquake.  Please refer to the Labour Cost Index: March 2011 quarter and Quarterly Employment Survey: March 2011 quarter for specific information.

The LCI tracks nearly 6,000 positions and measures changes in pay rates for a fixed quantity and quality of labour.

The QES is designed to measure quarterly estimates of change in, and levels of, average hourly and average weekly (pre-tax) earnings, average weekly paid hours, and the number of filled jobs. QES statistics are derived quarterly from approximately 18,000 surveyed business locations in a range of industries and regions throughout New Zealand.

Geoff Bascand 3 May 2011

Government Statistician