Wage rates nudged ahead in March quarter

Wage rates nudged ahead 0.5 per cent in the March quarter, according to Statistics New Zealand's Labour Cost Index survey released today.

Rates in the private sector rose 0.5 per cent, while public sector rates rose 0.4 per cent.

For the year, wages rates on average were up 2.2 per cent, with a 2.1 per cent rise in the private sector and a 2.7 per cent rise in the public sector.

Inflation rose 1.6 per cent in the March year. In its separate Quarterly Employment Survey, the department found that full-time equivalent jobs grew by 0.2 per cent in the March quarter for a 3.3 per cent annual gain.

Both the wage rate rises and the gain in jobs was less than economists had been forecasting, which suggests that despite the tight labour market, inflationary pressures from that direction are mild.

Seasonally-adjusted total hours paid rose 1.7 per cent in the quarter for an annual gain of 3.0 per cent.

That helped raise seasonally adjusted total gross earnings by 1.8 per cent for the quarter or 6.4 per cent for the year.

The average total hourly earnings was relatively unchanged at an estimated $19.85, while average total weekly earning rose by 1.5 per cent to $770.93 this quarter.

The annual increase in paid hours continues to be lower than the increase in earnings, possibly, the department said, due to: increase in wage rates; rises in the number of higher-paid employees; increases in overtime hours worked; and a shift from part-time to full-time employment.

The statistics showed that full-time employment rose while part-time employment fell, which is typical for the March quarter.

However, growth in full-time employees has been greater than growth for part-time employees for the last three years, reflecting the tight labour market conditions and business growth, SNZ said.

The hourly earnings rate in the private sector rose 0.2 per cent to $18.59 but public sector rates increased by 0.6 per cent to $24.83.

The 0.4 per cent rise in salary and wage rates (including overtime) was the smallest quarterly increase since the September 2000 quarter. Rates for the year were up 2.2 per cent.

Over the year, public sector rates were up 2.6 per cent and private sector rates up 2.1 per cent.

Carpenters and jointers' salary and wage rates rose 0.9 per cent in the quarter, reflecting the boom in the building industry.

Their rates are up 4.3 per cent for the March year.

- NZPA