Wage growth continues to moderate

By Leith van Onselen

The Australian Bureau of Statistics (ABS) has just released its Wage Price Index for the December quarter of 2012, which revealed a continued moderation of wage pressures across the economy (see below charts).

According to the ABS, wages grew by 0.8% in the December quarter, with both the public and private sectors also experiencing wages growth of 0.8%. Over the year, total wages grew by 3.4%, with the private sector experiencing 3.4% growth and the public sector 3.2% growth. The result marked the third consecutive quarter where the growth in wages has slowed.

You can see from the next chart, which plots non-seasonally adjusted wages growth on a 6-month moving average basis (in order to reduce volatility), that Western Australia has led the nation in wages growth since the commencement of the commodities boom in 2004:

In a similar vein, the mining sector has experienced by far the highest wages growth in the nation, with retail trade the laggard over much of this period (see below charts).

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Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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