Wages up 0.7pc in three months to June 30, construction pay surges

A higher proportion of private sector workers got a wage increase in the June quarter, with the construction sector receiving the largest pay rises, new data shows.

Wages grew at 0.7 per cent in the June quarter, with workers in the construction sector receiving the largest pay increases, new Australian Bureau of Statistics data shows.

“A higher proportion of private sector jobs received a wage increase compared to recent June quarters,” the bureau said.

“The average size of wage rises in the private sector grew quickly over the last two quarters, and at 3.8 per cent this quarter was the highest average increase recorded since June 2012.”

Commonwealth Bank economists had expected wages to rise by 0.8 per cent over the three months to June 30 – bringing the annual increase at 2.7 per cent.

“For all the rhetoric and anecdotes of stronger wages growth, the official WPI (Wage Price Index) has been stubbornly slow to lift,” the bank’s economists wrote in a note last week.

“It is true that wages growth has accelerated. But the pace of change has been modest considering the tightness in the labour market.”

Wages also grew at 0.7 per cent over the last quarter, lower than the market had expected, with an increase of 2.4 per cent over the year to the end of March.

In board minutes released on Tuesday, the Reserve Bank board said it “expects” rather than “needs” to keep hiking rates to tame the highest rate of inflation since the 1990s.

The RBA on August 2 delivered a third straight increase of half a percentage point to its cash rate, lifting it to 1.85 per cent, up from just 0.1 per cent as recently as April.

The RBA minutes revealed the board’s view that firms were expecting wages growth to reach 3.75 per cent by the end of 2024.

“In liaison, over 60 per cent of private sector firms indicated that they expected to raise wages by more than 3 per cent over the year ahead,” the minutes read.

“Recent high inflation outcomes were a factor in current wage negotiations, but to date most firms expected to raise wages by less than inflation.”

Originally published as Wages up 0.7pc in three months to June 30, construction pay surges