SYDNEY Feb 22 Australian wage growth stayed
stuck at record lows last quarter amid subdued demand for
labour, a drag both on household spending power and on the
course of inflation.
The Australian Bureau of Statistics said on Wednesday that
its wage price index rose just 0.5 percent in October-December,
in line with forecasts and compared with 0.4 percent the
Annual wage growth held at 1.9 percent, the lowest on
record. That was less than half the wage growth rate workers
enjoyed a decade ago when a mining boom boosted pay across
The slowdown contributed to an unwelcome decline in
inflation, which also hit all-time lows, and was a major reason
the Reserve Bank of Australia (RBA) cut interest rates twice
last year to a record low of 1.5 percent.
The central bank has since argued that wage growth had
finally bottomed, with its liaison with firms suggesting the
constant downward pressure on labour costs was easing.
Earlier on Wednesday, RBA Governor Philip Lowe indicated
that cutting rates further would not be in the "national
interest" as the central bank walks a tight rope to balance
growth against the risk of a debt-fuelled boom and bust.
The ABS also released data showing home building rebounded
1.3 percent in the quarter to A$26.7 billion, after unexpectedly
slumping 3.9 percent in the previous three months. The
third-quarter number was revised from a drop of 5.7 percent.
Total construction work still fell 0.2 percent in the fourth
quarter, after a 4.4 percent drop in July-Sept, to stand at
The rise in building work added to expectations the economy
as a whole bounced back in the fourth quarter after a shock
contraction the previous quarter, although the scale of the
recovery might not be as great as first hoped.
Australian steel maker BlueScope Steel, which
serves the construction industry, was sanguine about the outlook
for building after reporting a trebling in its half-year
"My view is there's a few years to run in that construction
process. And our customers are saying that they are continuing
to see very strong demand in that space," Managing Director Paul
O'Malley told reporters.
(Reporting by Swati Pandey; Additional reporting by Sonali Paul