Wage growth in the Irish economy is accelerating at its fastest pace in a decade, according to the Central Statistics Office (CSO).
The agency’s latest earnings data showed average weekly salaries rose to €771.12 in the second quarter of 2019, up from €745.09 a year earlier.
This represents an annual growth rate of 3.5 per cent, compared to an average of 3.3 per cent last year, 1.9 per cent in 2017 and an anaemic 0.2 per cent in 2014.
Wage pressure in the economy has begun to emerge as the labour market tightens.
The figures showed that IT workers continue to command the biggest salaries in the Republic while those in the hospitality sector get paid the least.
Workers in the information and communications sector had average weekly earnings of €1,212.57, followed by workers in the financial, insurance and real estate sector, who earned €1,140.09.
This was nearly 50 per cent above the national average and more than three times the earnings of those in the accommodation and food services sector, who had the lowest weekly earnings of €365.59.
The CSO's Labour Force Survey, published separately this week, shows there were a record 2.3 million people employed in the economy in the second quarter and while employment grew by 45,000 or 2 per cent on an annual basis in the three months to June.
Reflecting the growth in activity and employment, average earnings increased in 12 of the 13 sectors of the economy, the earnings data show.
By the numbers
The largest percentage increase was 11.4 per cent in the administrative and support services sector where average weekly earnings rose from €548.02 to €610.61 in the year to the second quarter. The second largest increase was 7.2 per cent in the arts, entertainment, recreation and other service activities sector which rose from €483.19 to €518.13 over the year.
Average weekly earnings in the public sector (including semi-state) showed an increase of 2 per cent from €962.16 to €980.98 in the year to the second quarter.
Unemployment has fallen to close to 5 per cent from nearly 16 per cent in 2012. The rapid turnaround has brought with it renewed fears of overheating. When employers chase a shrinking pool of labour, wages get bid up. To pay for higher wages, firms must put up their prices, which can feed back into further wage demands from workers in a sort of negative feedback loop. When such a wage-price spiral develops it can be difficult to halt.
Separately, figures from the Economic and Social Research Institute suggest average hourly earnings grew by over 4 per cent last year and will grow by 4.5 per cent this year.