Wage and payroll statistics for December 2008
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Overall Wage and Payroll Statistics

     According to the figures released today (March 26) by the Census and Statistics Department, the average wage rate for all the major sectors surveyed, as measured by the wage index, rose by 0.3% in nominal terms in December 2008 over a year earlier.  

     About 57% of the companies recorded increase in average wage rates in December 2008 compared with a year ago, compared to 65% recorded in September 2008.  On the other hand, 36% of the companies recorded decrease in average wage rates over the same period, 11 percentage points higher than the corresponding figure recorded in September 2008.  The remaining 7% reported virtually no change in average wage rates.

     After discounting the increase in consumer prices as measured by the Consumer Price Index (A), the overall average wage rate for all the major sectors surveyed decreased by 1.0% in real terms in December 2008 over a year earlier.

     As for payroll, the index of payroll per person engaged for all the major sectors surveyed decreased by 2.1% in nominal terms in the fourth quarter of 2008 over a year earlier.  

     After netting out the effect of the increase in consumer prices as measured by the Composite Consumer Price Index, the average payroll per person engaged decreased by 4.3% in real terms in the fourth quarter of 2008 over a year earlier.

     The wage rate includes basic wages and other regular and guaranteed allowances and bonuses.  Payroll includes elements covered by wage rate as well as other irregular payments to workers such as discretionary bonuses and overtime allowances.  The payroll statistics therefore tend to show relatively larger quarter-to-quarter changes, affected by the number of hours actually worked and the timing of payment of bonuses and back-pay.

Sectoral Changes

     For the nominal wage indices, year-on-year increases were observed in the financing, insurance, real estate and business services sector, the wholesale, retail and import/export trades, restaurants and hotels sector and the personal services sector in December 2008, ranging from 0.6% to 1.3%.  The increases were, however, notably smaller than the year-on-year increases recorded by these sectors in September 2008.  On the other hand, there were 0.2% and 4.2% decreases in the manufacturing sector and the transport services sector respectively.

     For the real wage indices, year-on-year decreases ranging from 0.6% to 5.4% were recorded in all the major sectors surveyed in December 2008, except the financing, insurance, real estate and business services sector.  For the financing, insurance, real estate and business services sector, the index stayed virtually the same when compared with that for December 2007.

     The year-on-year changes in the nominal and real wage indices for the selected major sectors from December 2007 to December 2008 are shown in Table 1.

     As for the nominal indices of payroll per person engaged, year-on-year decreases were recorded in almost all major sectors surveyed in the fourth quarter of 2008, ranging from 1.1% to 3.0%.   The wholesale, retail and import/export trades, restaurants and hotels sector was the only sector that recorded growth in the fourth quarter of 2008, at 1.2% when compared with the same quarter a year earlier.

     For the real payroll indices, year-on-year decreases were observed in all major sectors in the fourth quarter of 2008, ranging from 1.1% to 5.2%.

     The year-on-year changes in the nominal and real indices of payroll per person engaged for selected major sectors from the fourth quarter of 2007 to the fourth quarter of 2008 are shown in Table 2.  The quarterly changes in the seasonally adjusted nominal and real indices of payroll per person engaged between the fourth quarter of 2007 and the fourth quarter of 2008 are shown in Table 3.

Other information

     Both wage indices and payroll indices are compiled quarterly based on the results of the Labour Earnings Survey conducted by the Census and Statistics Department (C&SD).  

     Wage statistics are conceptually different from the payroll statistics.  Firstly, wage rate for an employee refers to the sum earned for his normal hours of work.  It covers basic wages and other regular and guaranteed allowances and bonuses, but excludes earnings from overtime work and discretionary bonuses, which are however included in payroll per person engaged.  Secondly, the payroll index of an industry is an indicator of the simple average payroll received per person engaged in the industry.  Its movement is therefore affected by changes in wage rates, the number of hours of work and occupational composition in the industry.  In contrast, the wage index of an industry is devised to reflect the pure changes in wage rate, with the number of hours of work and occupational composition between two successive statistical periods being kept unchanged.  In other words, the wage index reflects the change in the price of labour.  Thirdly, wage index only covers employees up to the supervisory level (i.e. not including managerial and professional employees), whereas payroll index covers employees at all levels and proprietors actively engaged in the work of the establishment.  Because of these conceptual and enumeration differences between payroll and wage statistics, the movements in payroll indices and in wage indices do not necessarily match closely with each other.

     It should also be noted that different consumer price indices are used for compiling the real indices of wage and payroll to take into account the differences in their respective occupation coverage.  Specifically, the Composite Consumer Price Index, being an indicator of overall consumer prices, is taken as the price deflator for payroll of workers at all levels of the occupational hierarchy.  The Consumer Price Index (A), being an indicator of consumer prices for the middle to lower income groups, is taken as the price deflator for wages in respect of employees on occupations up to the supervisory level.

     Starting from this quarter, the X-12 ARIMA method has replaced the X-11 ARIMA method for performing seasonal adjustment of the nominal and real indices of payroll per person engaged.  The X-12 ARIMA method is an update to the X-11 ARIMA method with enhanced modelling and diagnostic capabilities.  The X-12 ARIMA has now been a standard method used by statistical offices in many countries/territories for performing seasonal adjustment of statistical series.

     Detailed breakdowns of the payroll and wage statistics are published in the “Quarterly Report of Wage and Payroll Statistics, December 2008”.  Users can download this publication free of charge at the Website of the Census and Statistics Department (C&SD)  (http://www.censtatd.gov.hk/products_and_services/products/publications/statistical_report/labour/index.jsp).  Print version of this publication is available for sale at HK$50 per issue.  Purchase can be done in person at the Publications Unit of the C&SD (Address: 19/F Wanchai Tower, 12 Harbour Road, Wan Chai; Tel.: 2582 3025) or through mail order by returning a completed order form which can be downloaded from the C&SD’s website (www.censtatd.gov.hk/products_and_services/other_services/provision_of_stat/mail_ordering_of_publications/index.jsp).  Print version of this publication is also available for sale online at the Government Bookstore of the Information Services Department (www.bookstore.gov.hk).

     For enquiries on payroll and wage statistics, please contact the Wages and Labour Costs Statistics Section of the Census and Statistics Department at 2887 5550.

Ends/Thursday, March 26, 2009
Issued at HKT 16:30

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