Wages Update Chartpack

7/31/2019 Wages Update Chartpack

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Wage Price

IndexChart pack updating the latestgranular information onAustralia wages.

2012 Q1


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National overview

Public sector wage inflation has moderated significantlybut consistent with a softer, but not collapsing, labourmarket private sector wage inflation has been morerobust. The annual pace for private wages has eased from4% in 2011Q1 to 3.6% in Q3, Q4 and now 2012Q1.

2

ages pressures are u ng n t e m n ng states, an nthe mining sector more broadly, but wage inflationcontinues to moderate in the south-east of the country.

Even including bonuses, wage inflation is still subdued.

Westpac expects the pace of wage inflation to easefurther to 3.2%yr by end 2012 as the unemployment ratecontinues to drift higher.


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Wage inflation continues to moderate

2

3

3

4

5%qtr%yr

WPI qtr (rhs)

WPI annual (lhs)

Sources: ABS, Westpac Economics

average annual rate since

series be an 1998

0

1

0

1

2

Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12

3


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Private vs. public sector wages

3

4

5

3

4

5%qtr%yr


Private sector

average since 1998

0

1

2

0

1

2


private qtr (rhs) public qtr (rhs) private yr (lhs) public yr (lhs)

4


5/36

Including bonuses, no sign of a wage breakout

4

5

4

5

%yr%yr

Private sector WPI (ex bonuses)

Private sector WPI including bonuses, nsa

2

3

2

3



5


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1.9

2.1

2.3

1

2

3% chg, 2qtrs% chg, 2qtrs

Soft jobs momentum, wage outcomes moderate

0.9

1.1

1.3

1.5

.

-2

-1

0

Mar-00 Mar-03 Mar-06 Mar-09 Mar-12

Trend full-time employ (lhs)

WPI (rhs) Sources: ABS, Westpac Economics

6


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Labour market has eased significantly

10

20

30

40

50

3.5

4.0

4.5Net bal. %WPI %yr


labour hard to find

-50

-40

-30

-20

-100

2.0

2.5

3.0

Sep-99 Sep-02 Sep-05 Sep-08 Sep-11

Westpac-ACCI labour easy/hard - adv 3 qtrs (rhs)Private WPI %yr (lhs)

labour easyto find

7


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Industries with the fastest wages growth

Mining is the sector with the fastest wages growthnationally but in Qld and WA, construction wage

inflation is now running around 6%yr vs. mining 4%yr.

Wholesale wage inflation was running at 4%yr but haseased back as wages in that sector moderate in NSW.

8

Wage inflation in the professional & technical sectors areaccelerating in the mining states (6.1%yr Qld).

However, professional wage inflation is now under 4% inthe large south-eastern states.

Construction wages are accelerating in the mining statesbut are running at a slower than the state averages in thesouth-east.


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Wage inflation by industry & state

9


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Sectors with strongest wages inflation

4

5

6

7

4

5

6

7%yr%yr

original data

0

1

2

3

0

1

2

3


construction

wholesale trade

professional & tech

miningSources: ABS, Westpac Economics

10


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Mining: Qld converging with WA

4

5

6

4

5

6% ann% ann

*Total hourly rate ex bonuses

1

2

3

1

2

3

Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12

WA

Qld

Sources: ABS, Westpac Economicsnsa

11


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Construction: the mining states leading the way

5

6

7

5

6

7% ann% ann

Vic WA

NSW Qld


1

2

3

4

1

2

3

4



12


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Wholesale: NSW has fallen back to the average

4

5

6

4

5

6% ann% ann

Vic

NSW

nsa*Total hourly rate ex bonuses

1

2

3

1

2

3

Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12

Qld


13


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Professionals: south-east is dipping away

5

6

7

5

6

7% ann% ann

Vic WA

NSW Qld


1

2

3

4

1

2

3

4



nsa

14


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Industries with modest wages growth

Retail wage inflation remains very modest despite signs ofan uptick in WA.

Health & social assistances wage inflation continues to bevery mild; again WA is the exception.

Public admin wa es startin to lift in WA ld wa es have

15

been more robust since late last year. Admin & services wages accelerating in WA while NSW is

surprisingly middling.

Surprising strength in NSW accom. & food services wages.

The almost 5% pace in NSW manufacturing wages (1.1pptabove national average & 1.3ppt above the state average)is very hard to explain on fundamentals.


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Sectors with softest wage inflation

4

5

6

7

4

5

6

7%yr%yr

Sources: ABS, Westpac Economicsoriginal data

0

1

2

3

0

1

2

3


retailhealth care & social assistance

public admin & safetyadmin & support

16


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Retail: converging on 3%yr but WA lifting

4

5

6

4

5

6% ann% ann

Vic WA

NSW Qld


1

2

3

1

2

3



17


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Health: WA the only state above 4%

5

6

7

5

6

7% ann% ann

Vic WA

NSW Qld


1

2

3

4

1

2

3

4



18


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Public admin: WA lifting rest moderating

5

6

7

5

6

7% ann% ann

Vic WA

NSW Qld


1

2

3

4

1

2

3

4



19


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Admin: Vic below 3%, WA soars, NSW middling

4

5

6

4

5

6% ann% ann

Vic WA

NSW Qld


1

2

3

1

2

3



20


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Industries with soft WPI growth

4

5

6

7

4

5

6

7%yr%yr


0

1

2

3

0

1

2

3


acc & food servicestransport, postal & warehousinginformation & mediautilities

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Acc & food: NSW & Vic ease, WA accelerates

4

5

6

4

5

6% ann% ann

Vic WA

NSW Qld


1

2

3

1

2

3



22


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Transport: Contained around 3%yr

4

5

6

4

5

6% ann% ann

Vic WA

NSW Qld


1

2

3

1

2

3



23


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Information & media: pressure easing

4

5

6

4

5

6% ann% ann

Vic


1

2

3

1

2

3



24


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Utilities: holding around or under 4%yr

4

5

6

4

5

6% ann% ann


1

2

3

1

2

3


Vic

NSW


25


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Industries with soft WPI growth

4

56

7

4

56

7%yr%yr


0

1

2

3

0

1

2

3


educationarts & recreational services

other servicesmanufacturing

26


27/36

Manufact. NSW wage inflation still robust

4

5

6

4

5

6% ann% ann

Vic

WA

NSW


1

2

3

1

2

3


Qld


27


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Education: NSW & Vic behind the drag

5

6

7

5

6

7% ann% ann


1

2

3

4

1

2

3

4


Vic WA

NSW QldSources: ABS, Westpac Economics

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Wages by state: WA is starting to kick again

WA wage inflation is clearly kicking higher. Not onlyis the stage average 4.6%yr for private wages vs.

national average 3.7%yr, but 8 of the 10 sectorsmeasured by the ABS in WA have wages runningabove the national average for that sector.

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In Qld of the 13 sectors measured have wageinflation above the national average for that sector.

In Vic & NSW only 4 of the 14 sectors have wageinflation running above the national average.

Wage pressures are clearly increasing in WA, andstarting to build in Qld, but to date these pressure arenot spreading to the south-east.


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Private WPI; WA on the rise again

5

6

7

5

6

7% ann% ann

Vic WA

NSW Qld

1

2

3

4

1

2

3

4

Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 Mar-12


30


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WA: 8 of 10 sectors > national average

5

6

7

5

6

7% ann% ann

man.construct.miningretailaccom. & foodtrans.professionsadmin.

1

2

3

4

1

2

3

4

Sep-09 Jun-10 Mar-11 Dec-11 Sep-09 Jun-10 Mar-11 Dec-11

Sources: ABS, Westpac Economics *Total hourly rate ex bonuses

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Qld: 6 of 13 sectors > national average

5

6

7

5

6

7% ann% ann

man.construct.miningretailaccom. & foodtrans.professionsadmin.

Sources: ABS,Westpac Economics

1

2

3

4

1

2

3

4

Sep-09 Sep-10 Sep-11 Sep-09 Sep-10 Sep-11


32


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NSW: 4 of 14 sectors > national average

5

6

7

5

6

7% ann% ann

utilitiesconst.

man.wholesaleretailaccom & foodtrans.


1

2

3

4

1

2

3

4



33


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Vic: 4 of 14 sectors > national average

5

6

7

8

5

6

7

8% ann% ann

utilitiesconst.man.

wholesaleretailaccom & foodtrans.


1

2

3

4

1

2

3

4



34


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DisclaimerDisclaimer

Westpac Institutional Bank is a division of Westpac Banking Corporation ABN 33 007 457 141. Informationcurrent as at date above. This information has been prepared without taking account of your objectives, financial

situation or needs. Because of this you should, before acting on this information, consider its appropriateness,

having regard to your objectives, financial situation or needs. Westpacs financial services guide can be obtained

by calling 132 032, visiting www.westpac.com.au or visiting any Westpac Branch. The information may containmaterial provided directly by third parties, and while such material is published with permission, Westpac accepts

no responsibility for the accuracy or completeness of any such material. Except where contrary to law, Westpacintends by this notice to exclude liability for the information. The information is subject to change without noticeand Westpac is under no obligation to update the information or correct any inaccuracy which may become

apparent at a later date. Westpac Banking Corporation is registered in England as a branch (branch number

35

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company registered in England (number 05660023) and is authorised and regulated by The Financial Services

Authority. Westpac operates in the United States of America as a federally chartered branch, regulated by theOffice of the Controller of the Currency and is not affiliated with either: (i) a broker dealer registered with the USSecurities Exchange Commission; or (ii) a Futures Commission Merchant registered with the US Commodity

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correspondence. 2012 Westpac Banking Corporation. Past performance is not a reliable indicator of futureperformance. The forecasts given in this document are predictive in character. Whilst every effort has been taken

to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affectedby incorrect assumptions or by known or unknown risks and uncertainties. The ultimate outcomes may differsubstantially from these forecasts.


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