Wage rate rises in March but at slowest pace in 11 years

The average wage rate across sectors increased 0.9% in nominal terms in March.

The average wage rates for selected industry increased 0.9% year-on-year in March, which is the slowest in more than 11 years, the Census and Statistics Department (C&SD) reported.

“[The] overall wages stayed on the rise in nominal terms in March 2021 over a year earlier, but the pace of increase decelerated slightly to the slowest in more than 11 years,” a government spokesman said. The average wage rate rise in March is also lower than the 1% rate recorded in December 2020.

Some 50% of companies reported increasing their average wage rates in March, compared to a year ago. Around 47% of firms made deductions, whilst the remaining 3% did not make any changes.

After discounting changes in consumer prices, the overall wage rate for all selected industries rose 0.6% in real terms over the same period.

The payroll per person, meanwhile, also increased by 0.7% in nominal terms, which is notable lower than the 1.8% recorded in the previous quarter. The spokesman also noted this is the slowest in more than 11 years.

“Payroll per person engaged in most major sectors either increased at slower rates or continued to decline in nominal terms,” the spokesman said.

Year-on-year increases, ranging from 1.1% to 2.1%, were recorded in sewerage, waste management and remediation activities; information and communications; financial and insurance activities; real estate activities; and professional and business services.

In contrast, decreases of 0.3% to 8.2% were registered in manufacturing; import/export and wholesale trades; retail trade; transportation, storage, postal and courier services; accommodation and food service activities; and social and personal services. 

“The pressure on the labour market has gradually eased more recently, and should ease further as the economy continues to recover, especially if the local epidemic remains well contained,” the spokesman said.

“This should render support to the overall earnings situation. Yet, as the pace of economic recovery is uneven across sectors, the earnings situations in some sectors may take a longer time to improve.”