Wage growth has peaked in NZ with the total salary & wages (labour cost index) steady at 4.3% y/y in Q2 with the main drivers inflation, market matching and retaining/attracting staff. Private sector rose 1.1% q/q and 4.3% y/y with the public sector lower at 0.6% and 4.2%, which is driven by collective agreements. Given that the minimum wage rose 7.1% on April 1, the increase in the labour cost index remained contained and well below inflation. Average hourly ordinary time earnings ex overtime remained elevated but eased to 6.9% y/y from 7.6%, which was the peak, with the private sector down to 7.7% from 8.2%. Significant moderation in wage growth still needed before the RBNZ eases.

NZ Wages y/y%

Source: MNI - Market News/Refinitiv