Wage Growth - SEPTEMBER 2011 Quarter - Archive
This section contains archived information that has been retained for reference purposes. To view current reports, please go to the Labour Market Information section.
Published: 1 November 2011
This note examines the wage growth measures from the Labour Cost Index (LCI) and the Quarterly Employment Survey (QES), which were released by Statistics New Zealand.
Wage growth is gradually recovering…
The September 2011 quarter data confirms that wage growth is gradually recovering (Figure 1). The adjusted LCI (which measures changes in pay rates for a fixed set of jobs and excludes performance-related pay increases) rose by 0.6% over the September 2011 quarter, lifting annual wage growth to 2.0%. The latest annual wage growth is up from a 1.9% increase for the year to June 2011 and a 1.6% increase a year ago.
Figure 1: Wage Growth Measures
Source: LCI, QES, Statistics New Zealand
| Wage Growth | Last year | Last quarter | This quarter |
|---|---|---|---|
| (annual % change) | Sep-10 | Jun-11 | Sep-11 |
| Adjusted LCI | 1.6 | 1.9 | 2.0 |
| Unadjusted LCI | 3.1 | 3.4 | 3.3 |
| QES | 1.3 | 3.1 | 3.2 |
Source: LCI, QES, Statistics New Zealand.
Annual wage growth in the public sector was 1.8% for the year to September 2011, including a 2.4% increase for the education and training industry. The increase in pay rates for this industry reflected a recent collective employment agreement for secondary school teachers. Private sector wages increased by 2.0% for the year to September 2011, following the 2.0% increase for the year to June 2011 and March 2011.
By industry, annual wage growth was strongest in information media and telecommunications (up 2.8%). By occupation, annual wage growth was strongest for automotive and engineering trades workers (up 2.4%).
Annual wage growth in the QES1 was 3.2% for the year to September 2011, up from 3.1% for the year to June 2011 and 1.3% a year ago (Table 1). The unadjusted LCI (which includes pay increases due to such factors as changes in performance, experience, and increased qualifications) eased slightly from 3.4% for the year to June 2011 to 3.3% for the year to September 2011, but up from 3.1% a year ago
… and is expected to recover further over the next two years
The latest results confirm that wage growth has been recovering gradually over the year. It is expected to continue growing modestly in the short-term, due to gradual recovery in the domestic economy and the labour market. However, wage growth is expected to accelerate once the Canterbury rebuild gathers momentum, the economy picks up strongly and the labour market conditions improve.
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