New Zealand Wages Accelerate as Recession Ends

November 10, 2009

New Zealand wages rose more than economists estimated in the third quarter as the nation emerged from a recession and companies began paying more to attract and retain workers. Wages for non-government workers, excluding overtime, increased 0.4 percent from the second quarter when they gained 0.3 percent, according to Statistics New Zealand’s labour cost index released in Wellington today. The median estimate of 10 economists surveyed by Bloomberg was for a 0.3 percent gain. New Zealand’s economy grew for the first time in six quarters in the three months to June, buoying business confidence and encouraging employers to expand production and retain workers. From a year earlier, wages rose 1.9 percent. That’s less than the 2.6 percent in the previous three months and was the smallest increase since the year ended June 30, 2001. Including overtime, wages for non-government workers rose 0.4 percent from the second quarter when they increased 0.3 percent, today’s report showed. From a year earlier, wages including overtime gained 2 percent. Wages for government workers rose 1.1 percent in the quarter, led by new pay deals for teachers and health workers. A separate series based on reported salary and ordinary- time wage rates of non-government workers gained 0.8 percent in the third quarter from the previous three months. From a year earlier, reported wage rates rose 3.7 percent. Business confidence rose to a 10-year high in September, according to a survey by ANZ National Bank Ltd. Reserve Bank Governor Alan Bollard said last week there are “welcome signs” the economy is growing again. He kept the official cash rate at a record-low 2.5 percent and said he is unlikely to raise borrowing costs until the second half of 2010.