**********************************************
Overall wage and payroll statistics
According to the figures released today (December 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 4.8% in nominal terms in September 2013 over a year earlier.
About 72% of the companies reported increase in average wage rates in September 2013 compared with a year ago. 27% 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 0.2% in real terms in September 2013 over a year earlier.
As for payroll, the index of payroll per person engaged for all the industry sections surveyed increased by 5.9% in nominal terms in the third quarter of 2013 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 0.5% in real terms in the third quarter of 2013 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 September 2013, ranging from 3.4% to 9.4%.
For the real wage indices, year-on-year increases ranging from 0.3% to 4.1% were recorded in the 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 September 2013. On the other hand, year-on-year decreases of 1.0% to 1.6% were recorded in the import/export, wholesale and retail trades; transportation; and financial and insurance activities sections. The real wage index for the manufacturing section remained virtually unchanged when compared with that in September 2012.
The year-on-year changes in the nominal and real wage indices for the selected industry sections from September 2012 to September 2013 are shown in Table 1.
As for the nominal indices of payroll per person engaged, year-on-year increases ranging from 2.0% to 8.0% were observed in all selected industry sections in the third quarter of 2013.
For the real payroll indices, year-on-year increases ranging from 0.2% to 2.4% were recorded in the sewerage, waste management and remediation activities; import/export and wholesale trades; retail trade; accommodation service (covering hotels, guesthouses, boarding houses and other establishments providing short term accommodation) and food service activities; information and communications; real estate activities; and professional and business services sections in the third quarter of 2013. On the other hand, year-on-year decreases ranging from 0.5% to 3.2% were recorded in the manufacturing; transportation, storage, postal and courier services; financial and insurance activities; and social and personal services sections.
The year-on-year changes in the nominal and real indices of payroll per person engaged for selected industry sections from the third quarter of 2012 to the third quarter of 2013 are shown in Table 2. The quarterly changes in the seasonally adjusted nominal and real indices of payroll per person engaged between the third quarter of 2012 and the third quarter of 2013 are shown in Table 3.
Commentary
Nominal wages sustained solid year-on-year growth in September 2013 on the back of favourable labour market conditions. Wage increases were more visible among lower-paid workers, reflecting the generally tight demand-supply condition in this segment.
Payroll per person engaged, which covers discretionary bonuses and other irregular payments, posted a more appreciable year-on-year increase in the third quarter of 2013. After discounting for inflation, overall payroll improved slightly by 0.5% in real terms over the period.
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, September 2013". 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, December 27, 2013
Issued at HKT 16:30
NNNN