According to Infometrics, New Zealand wages are on the rise across the board. During the last 12 months leading up to November 2021, the average salary per filled job increased by 7.6%, with the national average salary rising by 9.6%. This represents a 20-year high.
Infometrics principal economist, Brad Olsen, said that rising wages were likely attributable to higher inflation and the greater cost of living. He also pointed to increased wage and salary pressures faced by businesses at a time when employees were feeling more at liberty to explore their options elsewhere. This has made it more difficult for businesses to retain their employees unless they improved their pay levels.
Olsen added that though there were more jobs on offer, and with labour turnover figures also at a peak, it was getting harder for employers to retain employees and find new workers. While the easing of pandemic restrictions has helped to revive economic demand, Olsen said that there was still a strong need for more workers. He predicts that the job market will continue to accelerate this year, with wage growth continuing to rise. He views a lack of workers as being the only stumbling block.
Statistics New Zealand has already found signs of a labour shortage as the working-age population in the country records its lowest increase in nine years. The number of residents over the age of 15 years that joined the workforce rose by just 26,500 in 2021. This represents the smallest gain since 2012 and a sharp decline compared to the 70,500 increase recorded in 2020. The figures for 2020 have been linked to the flood of returning ex-pat Kiwis at the start of the pandemic, with that supply of workers now having dried up.
ANZ Bank NZ’s senior economist, Miles Workman, said that with a lack of imported labour, businesses are being forced to compete for a domestic labour pool to fill vacancies. This was adding to the tightness of the labour market. He added that the price pressures in the economy were likely to worsen if the Omicron variant reached the country and resulted in more people leaving the job market.
Sectors that have experienced the highest growth in workforce numbers include construction by 8.6% and professional services by 8.2%. Construction figures were likely driven by an increase in building consents that rose by 26% during the year ended November 2021, compared to the previous year. 48,522 new home build consents were granted, with Auckland leading with over 20,00 approvals.
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