Wage rates grow 2.0 percent

Salary and wage rates, which include overtime, increased 2.0 percent in the year to the September 2011 quarter, Statistics New Zealand said today. This includes a rise of 0.6 percent in the September quarter.

After the 2008/09 recession, annual wage rate growth in the labour cost index (LCI) dropped to a low of 1.5 percent in the year to the March 2010 quarter. Since then, the proportion of surveyed pay rates showing annual rises has grown – from 43 percent in the year to the March 2010 quarter to 56 percent in the year to the September 2011 quarter. The average size of annual increases has remained fairly steady for the past 18 months. However, the median (or middle) increase in the latest quarter (3.0 percent) is the highest for two years.

Salary and wage rates for the private sector increased 2.0 percent in the year to the September 2011 quarter. Public sector rates increased 1.8 percent, including 2.4 percent in the education and training industry.

The Quarterly Employment Survey (QES), also released today, includes seasonally adjusted employment estimates for the first time. For the September 2011 quarter, the seasonally adjusted number of full-time equivalent employees were flat (up 0.1 percent), while seasonally adjusted filled jobs rose 0.7 percent. Seasonally adjusted total weekly paid hours remained flat for the same period.

Average ordinary time (ie excluding overtime) hourly earnings rose 3.2 percent for the September 2011 year, after rising 3.0 percent for the June 2011 year.

The LCI tracks nearly 6,000 jobs and reflects changes in the rates that employers pay to have the same job done to the same standard. Rises to match the market, retain staff, or reflect the cost of living are shown in the LCI, while rises reflecting individual performance or years of service are filtered out.

The QES surveys approximately 18,000 business locations and reflects New Zealand employers' demand for paid labour. From the survey responses, we estimate the levels and changes in employment; total weekly gross earnings; total weekly paid hours; average hourly and average weekly earnings; and average weekly paid hours in the industries we survey.