Australia: Wage growth slowing – ANZ

Catherine Birch, senior economist at ANZ, notes that the Australia’s average annual wage increase (AAWI) granted in new EBAs was 2.7% in Q1 2019, down from 3.2% in Q3 2018, which had been the strongest result in two years.

Key Quotes

“The AAWI for all current agreements was steady at 2.7%.”

“The results were mixed across industries during Q1. The largest improvements were in hospitality (+0.6ppt to 3.2%) and other services (+0.5ppt to 3.1%).”

“The share of industries with AWWI above 3% doubled from 14% to 29% during the quarter, but is still down from the most recent peak of 48% in Q3 2018.”

“The private sector saw a slight decline in the AWWI to 2.9% but the public sector’s AAWI slowed more sharply to 2.4%, down from 3.3% in Q3 2018.”

“The reversal in the direction of wage growth across the EBA and GDP measures suggests that the gradual improvement we have seen in the wage price index (WPI) could fade. The June quarter WPI data is due to be released on 15 August.”