Wage growth in Irish economy accelerates to 2.5%
CSO figures show wages growing at fastest rate since recession
CSO figures show workers in the information and communications sector had average weekly earnings of €1,100.79 in the fourth quarter of last year
Wage growth in the Irish economy has accelerated to 2.5 per cent, the fastest rate recorded since the recession.
Figures from the Central Statistics Office (CSO) show average weekly earnings rose to €734.60 in the final quarter of last year, up from €716.86 a year previously.
“While volatile from quarter to quarter, the data suggest that some modest wage pressures are beginning to emerge as the labour market tightens,” Davy analyst David McNamara said.
“Allied to strong jobs growth and tax cuts at the turn of the year, this suggests that Irish consumer spending will continue to grow at a robust pace in the near term,” he added.
The CSO figures also showed that IT workers continue to command the biggest wages in Ireland while those in the hospitality sector get paid the least.
Workers in the information and communications sector had average weekly earnings of €1,100.79 in the fourth quarter, the data suggest.
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 €350.04.
Reflecting the wider pick-up in economic activity and a general tightening of the labour market, earnings increased in 10 of the 13 sectors of the economy last year.
The largest percentage increase was 5 per cent again in the IT sector with average weekly earnings rising from €1,048.15 to €1,100.79 in the year to the fourth quarter.
The second largest increase was 4.4 per cent jointly in the professional, scientific and technical, and the accommodation and food services sectors which rose from €885.17 to €923.82 and from €335.22 to €350.04 respectively.
Despite a significant pick-up in house building, earnings in the construction sector showed the largest annual decrease of 0.9 per cent, falling from €751.49 to €744.53.
The figures show weekly earnings across the public sector increased by 2.9 per cent in the year, rising from €920.13 to €946.55.
There was also an increase in average weekly earnings in the private sector of 2.3 per cent, from €660.01 to €674.94 over the same period.
The CSO noted that average earnings growth in the public sector can be partly attributed to wage restoration from April 2017.
In the past five years average weekly earnings in Ireland rose by 6. per cent, from €693.21 to €734.60, the figures show.
There were large differences in the changes to average weekly earnings across individual sectors over this time period, ranging between 1.6 per cent in the education to 16.8 per cent in the professional, scientific and technical sector.
Neil McDonnell, chief executive of the Irish Small and Medium Enterprises Association, said the weekly pay gap between the public and the private sector now stands at 40 per cent.
“The significant gap between public and private sector pay is unacceptable. Continued increases will put additional pressures on the private sector,” he said.
“In our most recent business trends research, 38 per cent of businesses will not increase pay this year. The reason for this is, quite simply, business can’t afford such increases,” he said.