8 February 2005
Labour Cost Index and Quarterly Employment Survey: December 2004 quarter
Continued Annual Growth in Wages
Wages are continuing to show annual growth, according to Statistics New Zealand's Quarterly Employment Survey (QES) and
Labour Cost Index (LCI). In the year to December 2004, the LCI salary and wage rates (including overtime) reflected the
tight labour market, with a 2.5 percent increase. This is the largest annual increase since the June 1997 quarter.
In the December 2004 quarter, salary and wage rates (including overtime) increased 0.8 percent. In the LCI, salary and
wage rates (including overtime) for food, beverage and tobacco manufacturing rose 1.5 percent in the December 2004
quarter. From the December 2003 quarter to the December 2004 quarter, food, beverage and tobacco manufacturing rose 2.9
percent. These are the largest quarterly and annual increases since the series began in the June 2001 quarter.
In the LCI, teaching professionals' salary and wage rates (including overtime) increased 1.9 percent in the December
2004 quarter, reflecting the settlement of collective employment agreements. Annually, teaching professionals' salary
and wage rates increased 3.0 percent.
In the QES, continued economic growth was reflected in the annual growth of filled jobs (up 4.6 percent), seasonally
adjusted total paid hours (up 4.8 percent), and seasonally adjusted earnings (up 7.0 percent). The annual increase in
filled jobs was driven by growth in full-time employment. In the December 2004 quarter, average total hourly earnings
remained relatively unchanged, at $20.25, due to total gross earnings and total paid hours increasing at similar rates.
The QES average earnings statistics reflect not only changes in pay rates, but also compositional and other changes in
the paid workforce. By comparison, the LCI measures changes in salary and wage rates for a fixed quantity and quality of
labour input.
Brian Pink
Government Statistician
ENDS