Steady Growth in Labour Costs

Steady Growth in Labour Costs

Labour costs rose by 1.8 percent from the June 2001 quarter to the June 2002 quarter, according to latest figures from Statistics New Zealand. The increase follows a movement of the same size from the June 2000 quarter to the June 2001 quarter.

The costs of other business inputs also rose from the June 2001 quarter to the June 2002 quarter.

Producer input prices rose by 1.5 percent, while capital goods prices increased by 1.4 percent over the same period. These input costs were reflected in the prices charged by businesses for their outputs, which rose 2.3 percent from the June 2001 quarter to the June 2002 quarter.

Consumer prices rose by 2.8 percent over the same period.

The salary and wage rates component of the Labour Cost Index increased by 2.1 percent from the June 2001 quarter to the June 2002 quarter, while the non-wage labour costs component increased by 0.4 percent over the same period.

The non-wage labour costs movement was partly driven by a 2.1 percent increase in annual leave and statutory holiday costs. This follows an increase of 5.2 percent from the June 2000 quarter to the June 2001 quarter, which was influenced by the number of paid statutory holidays rising by one day to 11 days, in 2001.

Employer superannuation costs also contributed to the rise in non-wage labour costs. These costs rose 1.3 percent, partly as a result of higher pay rates.

Workplace accident insurance costs fell 14.3 percent from the June 2001 quarter to the June 2002 quarter. This was due to ACC levy rate reductions. Costs are now 47.8 percent lower than the June quarter peak in 1997, and 15.6 percent lower than in the June 1993 quarter, the first June quarter in the series.

Other non-wage labour costs – medical insurance, motor vehicles available for private use and employer-related low interest loans – rose by 1.5 percent overall from the June 2001 quarter to the June 2002 quarter, with higher medical insurance costs contributing to the rise.

Brian Pink Government Statistician

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