Pay rates for salary and wage earners grew 1.9 per cent in the year to the March quarter, Statistics New Zealand said today.

Fifty-six per cent of salary and ordinary time wage rates rose in the year to the March 2011 quarter, up from 53 per cent, 49 per cent, and 46 per cent in the years to the December, September, and June 2010 quarters.

Meanwhile Annual wage growth declined from a peak of 4 per cent in the year to the September 2008 quarter to 1.5 per cent in the year to the March 2010 quarter.

ASB economist Jane Turner said wage growth had picked up from the rapid deceleration seen a year ago, as firms controlled wage costs during the recession.

However the patchiness of the economic recovery and subdued profitability were continuing to weigh on wage growth, she said.

"We expect an improvement in employment demand will flow through to a continued recovery in wage growth over the coming year," she said.

The Quarterly Employment Survey, also released today, showed that average total hourly earnings continued to rise.

In the March 2011 year, average total hourly earnings increased 2.6 per cent, which is up from a 1.9 per cent increase in the December 2010 year.

- NZ HERALD ONLINE