2 May 2012

Employment and wages flat

7:39 am on 2 May 2012

The recovery in the labour market is still tepid, with modest wage increases and employment remaining flat.

Wage growth slowed slightly in the first three months of the year, figures from Statistics New Zealand show.

Salary and wage rates, including overtime, rose 0.5% in the March quarter, down from the 0.6% increases in each of the previous two quarters.

The slowdown was more pronounced in the private sector, where wage and salary rates rose 0.5% compared with a 0.7% increase in the previous three months.

Agriculture and mining experienced above average wage increases and retail wages edged up.

Public sector pay growth was unchanged during the March quarter at 0.4% .

But the Quarterly Employment Survey indicated a reluctance among firms to hire, with weak growth in hours worked and a fall in part time work.

An economist at ASB, Jane Turner says there are signs the construction sector in Christchurch is picking up, but overall, the recovery in the labour market remains subdued.

"We do expect the labour market to recover, and Christchurch is a big part of that story, and once we see that reconstruction activity come though we should see a bit more of a pick up in employment growth."

On an annual basis, total wages grew a modest 2%.