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Overall wage and payroll statistics
According to the figures released today (March 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 4.2% in nominal terms in December 2014 over a year earlier.
About 71% of the companies reported increase in average wage rates in December 2014 compared with a year ago. 26% of the companies recorded decrease in average wage rates over the same period. The remaining 3% 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 2.5% in real terms in December 2014 over a year earlier. The decrease was mainly due to the larger year-on-year increase of 6.9% in Consumer Price Index (A) in December 2014 arising from the dissipation of effect of rates concession since October 2014.
As for payroll, the index of payroll per person engaged for all the industry sections surveyed increased by 3.9% in nominal terms in the fourth 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 decreased by 1.1% in real terms in the fourth quarter of 2014 over a year earlier. Similar to average wage rate, the decrease was largely attributable to the larger year-on-year increase of 5.1% in the Composite Consumer Price Index in the fourth quarter of 2014 arising from the dissipation of effect of rates concession since October 2014.
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 December 2014, ranging from 2.0% to 7.1%.
For the real wage indices, year-on-year decreases ranging from 0.6% to 4.6% were recorded in all selected industry sections in December 2014 except the personal services section where a year-on-year increase of 0.2% was recorded.
The year-on-year changes in the nominal and real wage indices for the selected industry sections from December 2013 to December 2014 are shown in Table 1.
As for the nominal indices of payroll per person engaged, year-on-year increases ranging from 0.9% to 7.0% were recorded in all selected industry sections in the fourth quarter of 2014.
For the real payroll indices, year-on-year decreases ranging from 0.1% to 3.9% were recorded in most of the selected industry sections in the fourth quarter of 2014. Yet, year-on-year increases ranging from 0.3% to 1.8% were recorded in the industry sections of manufacturing; real estate activities; and professional and business services.
The year-on-year changes in the nominal and real indices of payroll per person engaged for selected industry sections from the fourth quarter of 2013 to the fourth 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 fourth quarter of 2013 and the fourth quarter of 2014 are shown in Table 3.
Commentary
A government spokesman commented that nominal wages sustained broad-based year-on-year growth in December 2014 on the back of a largely stable labour market. The lower-paid workers continued to fare better.
Payroll per person engaged, which covers discretionary bonuses and other irregular payments, likewise stayed on the rise in the fourth quarter of 2014, with more appreciable increases in the professional and business services, real estate activities, and information and communications sectors.
The spokesman added that for 2014 as a whole, both wages and payroll per person engaged saw further growth in nominal terms which exceeded the underlying inflation rate. This indicated that amid the generally tight manpower situation during the year, continued real improvements in wage and payroll were seen after netting out the effects of Government's one-off relief measures. However, given the unsteady external environment and the recent slackening of the consumption and tourism-related sectors, we need to stay vigilant and monitor developments closely.
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, December 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, March 27, 2015
Issued at HKT 16:30
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