4 May 2010

Low wage growth picked to rebound later this year

6:09 pm on 4 May 2010

Wage growth is being picked to rebound later this year from a near-decade low in the March quarter. But a business lobby warns that wage increases will not be across the board.

Figures just released by Statistics New Zealand show that annual wage growth fell to its lowest level - 1.5% - since September 2000 at the end of March. Growth the same time a year ago was 3.4%.

But the number of hours worked jumped 1.1% - the biggest quarterly increase in two years.

The head of Hays recruitment firm, Jason Walker, predicts wage growth will pick up again from the middle of the year, but Business New Zealand chief executive Phil O'Reilly warns that this will not be across the board.

He says the economic recovery is not widespread and not all firms will be able to afford larger wage increases.

Signs of turnaround

There are signs, however, of a turnaround in the job market.

Total paid hours rose 1.1% in the first three months of the year, compared with the previous quarter, the largest quarterly increase in more than two years.

Firms slashed workers' hours during the recession and a recovery in hours worked is expected to precede an increase in jobs.

The number of filled jobs for the year to March was steady at 1.7 million.