New Zealand labour costs rose in line with expectations in the final three months of 2012 as the gathering pace of Canterbury's reconstruction effort saw the building and construction sector underpin gains.

Private sector salary and ordinary time wages rose 0.5 per cent in the three months ended December 31, as expected, and maintaining the same pace of growth from a quarter earlier, according to Statistics New Zealand's labour cost index. Public sector wages rose 0.5 per cent in the quarter, and including overtime, all salary and wages advanced a quarterly 0.6 per cent.

Private sector wages rose at an annual pace of 1.9 per cent, and all salary and wages gained 2 per cent in 2012.

Canterbury's construction sector led those gains, rising 1.6 per cent in the quarter and up 3.9 per cent from the same quarter a year earlier. Construction wages across the rest of the country rose a quarterly 0.8 per cent and an annual 2.3 per cent.


Today's release comes ahead of the household labour force survey on Thursday, which is expected to show the unemployment rate declined 0.2 of a percentage point to 7.1 per cent in the December quarter.

The labour market has confounded forecasters, with the headline unemployment rate remaining unexpectedly high, even as the economy shows tentative signs of improving.

The Treasury yesterday said it expects gradual employment growth this year as the Canterbury rebuild picks up momentum and improving business confidence leads to actual hiring.

Statistics NZ's quarterly employment survey, released separately, showed a surprise fall in private sector of 0.4 per cent to $25.17 an hour in the quarter. Economists surveyed by Reuters were picking 0.4 per cent growth.

The QES showed a 0.4 per cent increase in total filled jobs to 1.72 million and a similar gain in full-time equivalent employees to 1.36 million.

Manufacturing, a sector which has been under scrutiny as local plants shut up shop in the face of a strong New Zealand dollar, showed a 0.8 per cent gain in total filled jobs to 166,900 and a similar gain in FTEs to 186,700. Still, the sector has lost 0.2 per cent FTEs in the year, and 1 per cent of total filled jobs.

Construction FTEs climbed 2.6 per cent in the quarter to 97,200 with total filled jobs up 2.6 per cent to 122,800, while public administration and safety FTEs advanced 5.3 per cent to 87,300 with total filled jobs up 4.5 per cent at 94,400.

Forestry and mining reported the biggest quarterly decline in jobs, with FTEs falling 4.3 per cent to 11,000 and total filled jobs down 5.4 per cent to 12,300. Information, media and telecommunications FTEs shrank 3.9 per cent in the period to 27,200 and total filled jobs in the sector dropped 4 per cent to 30,900.


Total weekly paid hours rose 0.6 per cent to a seasonally adjusted 52.1 million in the quarter, turning around a 0.3 per cent contraction in the September period. Average weekly paid hours for FTEs' ordinary time shrank 0.2 per cent to 37.5 hours.