Wage and payroll statistics for December 2021
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According to the figures released today (March 28) 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 1.8% in nominal terms in December 2021 over a year earlier.
About 54% of the companies reported increase in average wage rates in December 2021 compared with a year ago. A total of 42% of the companies recorded decrease in average wage rates over the same period. The remaining 4% 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 1.1% in real terms in December 2021 over a year earlier.
As for payroll, the index of payroll per person engaged for all the industry sections surveyed increased by 1.5% in nominal terms in the fourth quarter of 2021 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 0.4% in real terms in the fourth quarter of 2021 compared with 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 of 0.9% to 3.1% were recorded in all selected industry sections surveyed in December 2021, except the transportation section where a year-on-year decrease of 0.2% was recorded.
For the real wage indices, year-on-year decreases of 0.2% to 3.1% were recorded in all selected industry sections surveyed in December 2021, except the real estate leasing and maintenance management section where a year-on-year increase of 0.1% was recorded.
The year-on-year changes in the nominal and real wage indices for the selected industry sections from December 2020 to December 2021 are shown in Table 1.
As for the nominal indices of payroll per person engaged, year-on-year increases of 0.5% to 3.0% were recorded in most selected industry sections surveyed in the fourth quarter of 2021. The only exceptions were the social and personal services section; and transportation, storage, postal and courier services section where year-on-year decreases of 0.2% and 0.3% were recorded respectively.
For the real payroll indices, the year-on-year changes recorded by different industry sections surveyed in the fourth quarter of 2021 varied. While year-on-year decreases ranging from 0.2% to 2.2% were recorded in the industry sections of manufacturing; import/export and wholesale trades; retail trade; transportation, storage, postal and courier services; real estate activities; and social and personal services, year-on-year increases of 0.2% to 1.0% were recorded in the industry sections of sewerage, waste management and remediation activities; accommodation and food service activities; information and communications; and financial and insurance activities. Meanwhile, the professional and business services section remained virtually unchanged.
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 2020 to the fourth quarter of 2021 are shown in Table 2. The quarterly changes in the seasonally adjusted nominal and real indices of payroll per person engaged in the same period are shown in Table 3.
Commentary
A Government spokesman said that the average wage rate for all selected industries showed a slightly faster year-on-year increase of 1.8% in nominal terms in December 2021, thanks to the improvement in employment conditions along with the economic recovery at that time. After discounting for inflation, the average wage rate decreased in real terms, as the year-on-year increase in the headline Consumer Price Index (A) in that month was enlarged by the low base caused by the Government's one-off relief measures a year earlier.
Payroll per person engaged, which covers discretionary bonuses and other irregular payments, also showed an accelerated year-on-year increase of 1.5% in nominal terms in the fourth quarter of 2021. Payroll per person engaged in most major industries saw year-on-year increases. In particular, the Consumption Voucher Scheme provided support to businesses of consumption-related industries, i.e. accommodation and food service activities, and retail trade, and saw payroll per person engaged in these industries register accelerated growth. On the other hand, payroll per person engaged in transportation, storage, postal and courier services; and social and personal services declined modestly.
The spokesman added that the latest figures indicated the situation up to end-2021 only. Due to the fifth wave of local epidemic, the labour market has deteriorated visibly of late, and will continue to face pressure in the near term. In response to the challenge, the Government has rolled out various relief measures to support enterprises and preserve employment, paving the way for a speedy recovery once the local epidemic subsides. Meanwhile, it is essential for the community to work in unison with the Government to put the local epidemic under control as quickly as possible. The Government will continue to monitor the 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 2021". Users can download the publication at the website of the Census and Statistics Department (C&SD) (www.censtatd.gov.hk/en/EIndexbySubject.html?pcode=B1050009&scode=210).
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/Monday, March 28, 2022
Issued at HKT 16:30
Issued at HKT 16:30
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