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Overall wage and payroll statistics
According to the figures released today (June 27) by the Census and Statistics Department (C&SD), the average wage rate for all the selected industry sections surveyed, as measured by the wage index, increased by 4.1% in nominal terms in March 2014 over a year earlier.
About 75% of the companies reported increase in average wage rates in March 2014 compared with a year ago. 24% of the companies recorded decrease in average wage rates over the same period. The remaining 1% reported virtually no change in average wage rates.
After discounting the changes in consumer prices as measured by the Consumer Price Index (A), the overall average wage rate for all the selected industry sections surveyed decreased by 0.1% in real terms in March 2014 over a year earlier.
As for payroll, the index of payroll per person engaged for all the industry sections surveyed increased by 5.1% in nominal terms in the first quarter of 2014 over a year earlier.
After discounting the changes in consumer prices as measured by the Composite Consumer Price Index, the average payroll per person engaged increased by 1.0% in real terms in the first quarter of 2014 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 recorded in all selected industry sections in March 2014, ranging from 0.9% to 9.7%.
For the real wage indices, year-on-year increases ranging from 0.5% to 5.2% were recorded in the manufacturing; accommodation service (covering hotels, guesthouses, boarding houses and other establishments providing short term accommodation) and food service activities; real estate leasing and maintenance management; professional and business services; and personal services sections in March 2014. On the other hand, year-on-year decreases of 3.2% and 1.5% were recorded in the import/export, wholesale and retail trades; and financial and insurance activities sections respectively. The real wage index for the transportation section remained virtually unchanged when compared with that in March 2013.
The year-on-year changes in the nominal and real wage indices for the selected industry sections from March 2013 to March 2014 are shown in Table 1.
As for the nominal indices of payroll per person engaged, year-on-year increases ranging from 1.7% to 8.7% were observed in all selected industry sections in the first quarter of 2014.
For the real payroll indices, year-on-year increases ranging from 0.3% to 4.4% were recorded in the sewerage, waste management and remediation activities; retail trade; accommodation service (covering hotels, guesthouses, boarding houses and other establishments providing short term accommodation) and food service activities; information and communications; financial and insurance activities; real estate activities; and professional and business services sections in the first quarter of 2014. Yet for the import/export and wholesale trades; and social and personal services sections, decreases of 2.3% and 0.8% were recorded respectively. The real payroll indices for the manufacturing; and transportation, storage, postal and courier services sections remained virtually unchanged when compared with that in the first quarter of 2013.
The year-on-year changes in the nominal and real indices of payroll per person engaged for selected industry sections from the first quarter of 2013 to the first quarter of 2014 are shown in Table 2. The quarterly changes in the seasonally adjusted nominal and real indices of payroll per person engaged between the first quarter of 2013 and the first quarter of 2014 are shown in Table 3.
Commentary
Nominal wages sustained steady year-on-year growth in March 2014 amid a persistently tight labour market. The lower-paid workers continued to fare better, bolstered in part by the upward adjustment of the Statutory Minimum Wage in May 2013.
Payroll per person engaged, which covers discretionary bonuses and other irregular payments, and hence is a better indication of the average employment earnings, stayed on a faster growth track in the first quarter of 2014. More notable pay increases were seen in financial and insurance activities, professional and business services, and retail trade, conceivably benefiting from their vibrant business activities in 2013. After adjusting for inflation, overall payroll improved by 1.0% year-on-year in real terms.
Other information
Both wage indices and payroll indices are compiled quarterly based on the results of the Labour Earnings Survey (LES) conducted by the 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, 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 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 relatively low expenditure group, is taken as the price deflator for wages in respect of employees engaged in occupations up to the supervisory level.
Detailed breakdowns of the payroll and wage statistics are published in the "Quarterly Report of Wage and Payroll Statistics, March 2014". Users can download this publication free of charge from the website of the C&SD (www.censtatd.gov.hk/hkstat/sub/sp210.jsp?productCode=B1050009).
For enquiries on wage and payroll statistics, please contact the Wages and Labour Costs Statistics Section (1) of the C&SD (Tel: 2887 5550 or email: wage@censtatd.gov.hk).
Ends/Friday, June 27, 2014
Issued at HKT 16:30
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