Wages were up 3.5 percent for the June 2008 year, the largest annual increase since the series began in 1992. Total hourly earnings were up 5.2 percent in the year to the June 2008 quarter. This is in spite of the impending slow-down in employment projections.

The reality is that the labour market is still strong and unemployment is still extremely low at 3.6 percent.  Workers are keen to address higher living costs, driven by basics such as food and fuel prices.

A quick analysis of real change in wages shows that annual average hourly earnings have increased by one percent per annum since 1992.  This is fairly consistent with New Zealand's productivity growth figures.

Hourly earnings have been growing at a faster rate than the CPI resulting in a real growth rate in hourly wages of one percent per annum.

The pendulum is swinging back to export industries in terms of wages and employment growth, while sectors reliant on domestic consumption or the housing market, such as retail and construction, are facing flat to falling employment growth and the smallest wage increases.

Public sector rates were up 3.7 percent on the year, while private sector rates were up 3.4 percent. The largest annual increases in terms of industry groups were in mining (up 5.3 percent), health and community services (up 5.1 percent), and finance and insurance (up 4.9 percent).

Annual increases for occupation groups ranged from 2.5 percent (for agriculture and fishery workers) to 5.9 percent (for personal and protective services workers).

Employment continued to grow in the June 2008 year, with FTE employment increasing by 2.5 percent. However, this is down from the 3.5 percent growth in the March 2007 year.

As expected in a period of tightening, full-time employment led the growth, up 2.8 percent on the year. Employment growth was driven by manufacturing, health and community services, and transport, storage and communication industries.

Employment growth in construction, and property and business services was flat, and retail trade employment was down by 4.4 percent for the June 2008 year, reflecting an easing domestic economy and imploding housing market.

Household Labour Force Survey data is due out this Thursday.  The unemployment rate is the one to watch out for, with commentators suggesting 3.8 percent for the year.  This could signal the slowdown in employment that everyone is predicting and that some are actually encouraging!

Detailed data on employment and labour costs are available from the Statistics New Zealand website here.