Salaries for workers in the South African formal non-agricultural sectors accelerated to 7,5% year-on-year (y/y) in the second quarter of 2007 from 4,9% in the first quarter of the year, the South African Reserve Bank Quarterly Bulletin showed on Tuesday.
Within the private sector, the gold mining as well as the trade, catering and accommodation services sectors were the only sectors that recorded nominal wage growth per worker lower than, or equal to, the upper end of the inflation target range, with rates of 4,8% and 6% respectively, the central bank said.
In the electricity sector, nominal remuneration per worker increased by no less than 13% — the highest rate of increase recorded over the period.
The fairly volatile year-on-year rate of increase in nominal remuneration per worker in the public sector more than doubled, accelerating from 3% in the first quarter of 2007 to 7,1% in the second quarter. Nominal remuneration per worker in the government transport, storage and communication services sector increased by 10,8% over this period, in national departments by 9,8% and in provincial governments by 6,3%.
The average rate of wage settlements amounted to 7,2% in the first nine months of 2007, compared with 6,4% for the same period in 2006. Settlement rates ranged from 4,5% in the transport sector to 12% in the retail sector.
The majority of settlements ‒88% — were concluded for a one-year period, while others will last up to four years, the bank said, quoting Andrew Levy Employment Publications.
Following the continued increases in employment, labour productivity growth decelerated from a year-on-year rate of 2,7% in the first quarter of 2007 to 2,2% in the second quarter, the bank noted.
The growth in output per worker in the formal non-agricultural sectors of the economy slowed from 3,9% in 2005 to 2,7% in 2006. Productivity growth in the manufacturing sector followed the same trend and decelerated from a year-on-year rate of 6,8% in the first quarter of 2007 to 5,3% in the second quarter.
The acceleration in wage growth together with weaker productivity growth caused nominal unit labour cost increases to accelerate from a year-on-year rate of 2,1% in the first quarter of 2007 to 5,2% in the second quarter.
Changes in nominal unit labour cost generally precede changes in consumer price inflation. The higher rate of increase in nominal unit labour cost could therefore pose additional inflation risk in future, the bank said. – I-Net Bridge