Labour Cost Index and Quarterly Employment Survey: June 2004 quarter

6 August 2004

Tight Labour Market Pressures Wage Rates

Salary and wage rates (including overtime), as measured by the Labour Cost Index (LCI), rose 0.6 percent in the June 2004 quarter, according to Statistics New Zealand. This is the largest June quarter increase since 1998. This result is also reflected in the Quarterly Employment Survey (QES), where average total hourly earnings increased 2.2 percent, to $20.28, in the June 2004 quarter. The QES result shows the impact of both wage increases and compositional effects. In the year to June 2004, salary and wage rates (including overtime), as measured by the LCI, rose 2.3 percent.

Public and private sector salary and wage rates (including overtime) both increased 0.6 percent in the June 2004 quarter. Annually, public sector salary and wage rates rose 2.7 percent, while private sector salary and wages increased 2.2 percent.

Construction continues to reflect reported skill shortages, with a wage increase of 0.8 percent in the June 2004 quarter. The main reasons supplied for increases were to retain staff and match market rates. On an annual basis, construction rose 3.0 percent. QES results for the June 2004 quarter showed the highest increase in average total hourly earnings since March 1990, when there was an increase of 3.2 percent. Total gross earnings have increased significantly in the quarter compared with the relatively unchanged total paid hours, resulting in the increased average total hourly earnings.

ENDS

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