NZ wage growth and inflation in line with expectations
(9 August 2012 – New Zealand) ASB Bank released its Quarterly Employment Survey (QES) on Tuesday, showing second quarter wage growth was in line with expectations as annual wage inflation remains steady.
The second quarter wage data provided further confirmation that underlying inflation pressures remain contained for now.
"There are signs of wage increases in the Canterbury construction industry, as to be expected. However, there is also little evidence this is spilling over to the construction industry throughout the rest of the country," according to the banks report.
As the recovery gains traction, skill shortages are likely to emerge in a number of areas and drive wage inflation higher over 2013. However, for the time being, the gradual pace of labour market recovery indicates wage inflation pressures will remain subdued over 2012.
The QES showed some recovery in employment indicators, following a lacklustre first quarter performance.
Overall, it appears that the gradual recovery in the labour continued over the first half of 2012.
"We are more confident in our expectation of a modest increase in employment growth in Thursday’s Household Labour Force Survey (HLFS).
"We expect employment to increase 0.4 percent, quarter on quarter (in line with market expectations), although the QES does suggest the possibility of a stronger result. Meanwhile, we expect the unemployment rate to fall to 6.5 percent (also in line with market expectations), but see the possibility of a sharper decline."
"There are signs of wage increases in the Canterbury construction industry, as to be expected. However, there is also little evidence this is spilling over to the construction industry throughout the rest of the country," according to the banks report.
As the recovery gains traction, skill shortages are likely to emerge in a number of areas and drive wage inflation higher over 2013. However, for the time being, the gradual pace of labour market recovery indicates wage inflation pressures will remain subdued over 2012.
The QES showed some recovery in employment indicators, following a lacklustre first quarter performance.
Overall, it appears that the gradual recovery in the labour continued over the first half of 2012.
"We are more confident in our expectation of a modest increase in employment growth in Thursday’s Household Labour Force Survey (HLFS).
"We expect employment to increase 0.4 percent, quarter on quarter (in line with market expectations), although the QES does suggest the possibility of a stronger result. Meanwhile, we expect the unemployment rate to fall to 6.5 percent (also in line with market expectations), but see the possibility of a sharper decline."
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