Economic uncertainty could hasten slowdown in salary growth despite steady monthly gains
Annual advertised salary growth inched up slightly in March amid stable monthly growth, according to the latest data from SEEK.
Its Advertised Salary Index showed a 3.7% year-on-year increase in advertised salary growth, as monthly growth saw a stable 0.3% increase.
Dr Blair Chapman, SEEK senior economist, noted that if advertised salary growth continues at this pace, annual growth may slow to 3.4% by June.
"However, an increase in economic uncertainty combined with a slow start to the year for the labour market may see annual advertised salary growth slow faster," Chapman said in a statement.
The findings come as the Wage Price Index (WPI) rose to 3.2% over the 12 months to the December quarter, according to the Australian Bureau of Statistics.
"So, with advertised salary growth above 3.2% it suggests that we may see a slight reacceleration of broader wage growth for a couple of quarters," Chapman said.
But employers across Australia have been expressing concerns over the impact of excessive wage growth recently.
The Ai Group, citing data from the ABS, noted that the wages bill paid by non-mining businesses has grown 25.8%, well ahead of the 18.3% rise in sales income over the same period.
"The soaring national wages bill is putting increasing pressure on business balance sheets, which augurs poorly for a return to private sector growth," said Innes Willox, chief executive of the Ai Group, in a statement.
"With wages growing much faster than income, businesses have had to wear the difference on the balance sheet. There has been no growth in non-mining business profits for the last two years as a result."
Willox warned that excessive wage growth will have "deleterious consequences for the prospects of a durable return to growth."
"With inflation now having significantly lowered, it is imperative for governments to lead a return to wage moderation across Australia," he said.
