Settlements steady, but just ahead of inflation

The latest data from the LRD PayLine database of collective agreements show a median (midpoint) increase of 3.1% in the three months to June. This compares with an inflation rate of 3.0% for the year to June.

Figures from other pay analysts show remarkably little variation from the LRD data, with Incomes Data Services having a median to June of 3.0% and Industrial Relations Services 2.9% for the same period. Like the LRD figure, these were unchanged from the median levels for May.

However, despite an increase in inflation for the second successive month, the increase in average earnings in the year to May was 4.1%, down on the 4.6% for the year to April.

Vacancies

Nevertheless, there are indications that demand for labour is picking up. The latest government statistics indicated in increase in the number of vacancies, not seasonally adjusted, to 643,400 – up 60,500 from a year ago – and a new survey is predicting that most employers are planning to take on new staff soon.

Inflation

The inflation figure for June reflected higher interest rates, and the July figure is likely to show a similar increase. Independent forecasters on average predict inflation in the fourth quarter of 2004 to be 3.1%, and expect earnings increases in 2004 to average 4.4%.