New Zealand sees Strong Job Growth but Minimal Wage Rises

by Ray Clancy on August 4, 2016

Statistics New Zealand reports job growth increased by 3.1 per cent in the second quarter of 2016, up from 2.2 per cent in the January through March period of the year, driven in part by accommodation and food services, construction and health services. However, annual wage growth remained subdued in a period of low consumer price inflation.

‘There were 14,000 more jobs in accommodation and food services, up a strong 11 per cent in the June year,’ said Statistics New Zealand business prices manager Sarah Williams.

startupThe data shows an additional 10,000 construction jobs (up 6.8 per cent), 9,100 more health care and social assistance jobs (up 4.1 per cent) and 9,000 new professional, scientific, technical, administrative and support services jobs (up 3.6 per cent).

Meantime, annual wage inflation increased by 1.5 per cent in the second quarter of 2016, in line with levels for the past three years. Compared to 2015, the consumer price index – which measures the prices of goods and services that households buy – was up by 0.4 per cent.

‘The gap between the labour cost index (LCU) and inflation was 1.1 per cent, the smallest gap since the end of 2014,’ Williams said.

The 1.5 per cent increase in the LCI in the most recent quarter compares with a 1.6 per cent increase in the year in the first quarter. Private sector wage inflation was 1.6 per cent in June, while for the public sector it was 1.3 per cent.

‘It’s great to see more people moving to areas where skills are required,’ said employment minister Steven Joyce. ‘Construction is now at an all-time high and that trend is set to continue. Wage growth is also increasing at a healthy margin over inflation.’

‘The growth in jobs underlines our commitment to creating an environment where businesses have the confidence to invest and where people are able to gain the skills to work in areas of growth. These are key priorities in the Government’s Business Growth Agenda.’

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