Salary and wage rates as measured by the labour cost index (LCI) rose just 1.5 per cent in the year to the March quarter, the slowest rise in more than nine years.

Figures released by Statistics New Zealand (SNZ) today show public sector salary and wage rates, which include overtime, rising 2.3 per cent, while in the private sector the increase was 1.3 per cent.

In the March quarter, salary and wage rates, including overtime, grew 0.3 per cent, with the public sector up 0.5 per cent and private sector up 0.3 per cent.

The annual 1.5 per cent rise in the LCI was the lowest since the year to September 2000. It was a continuation of the steady decline in the growth of salary and wage rates, including overtime, from a peak of 4 per cent in the year to September 2008, the highest annual rise since the series started in 1992, SNZ said.

The Quarterly Employment Survey (QES), also published today, showed average total hourly earnings increased 2.1 per cent for the year to the March 2010 quarter, down from a 3.7 per cent increase recorded for the year to the December quarter.

The latest annual increase in average total hourly earnings was the lowest since the year to the December 2004 quarter, SNZ said.

The QES results also showed that seasonally adjusted gross earnings increased 2 per cent for the year to the March 2010 quarter, while the seasonally adjusted total paid hours fell 0.1 per cent, and full-time equivalent employees fell 0.5 per cent to 1.31m.

For just the March quarter, compared to the three months to December, seasonally adjusted total paid hours were up 1.1 per cent, and total gross earnings up 0.7 per cent, while full time equivalent employees were 0.1 per cent lower.

The QES showed that the recent period of decline in labour demand had abated, SNZ said.

Filled jobs were up 0.1 per cent compared to a year earlier at 1.67m, as a 3.2 per cent rise in part time employment negated a 1.2 per cent fall in full time work.

In the March quarter, filled jobs were down 0.9 per cent, as part time employment fell 4.5 per cent due mainly to the seasonal fall in the education and training industry.

The LCI measures changes in pay rates for a fixed quantity and quality of labour, while the QES is designed to measure quarterly estimates of change in, and levels of, average hourly and average weekly pre-tax earnings, average weekly paid hours, and the number of filled jobs.

In the year to March the education industry had the biggest rise in salary and wage rates, including overtime, lifting 3.2 per cent, followed by health and community services with a 2.6 per cent gain, according to the LCI.

In the March quarter, manufacturing of non-metallic mineral products, and of transport equipment, machinery and equipment had the largest increases, with gains of 0.6 per cent.

Reference: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10642677