The latest figures from the Central Statistics Office (CSO) show that wage pressures continued to build in the first quarter 2019. Weekly earnings increased by 3.4% year on year (yoy), marginally down from 3.5% yoy seen in the fourth quarter 2018.

Wage growth was primarily driven by the private sector, where weekly wages grew by 4.2% yoy (up from +3.9% yoy in 2018 Q4). Public sector weekly wages grew by just 1.2% yoy (down for +1.8% yoy).

Weekly wage growth mainly stemmed from an increase in hourly earnings (+2.3%) and bonus pay (+6.5% yoy on a 4QMA basis), although there is some increase in hours worked also coming through (+1.3% yoy).

Wage growth was widespread, with all NACE sectors experiencing gains (on a 4QMA basis). With the influx of FDI, mainly in the tech sector, it comes as no surprise that weekly earnings in IT grew by a healthy 7% yoy (4QMA), the strongest growth of all sectors. This was followed by the transport sector (+6.5% yoy), administrative and support services (+6.2% yoy) and construction (+6.2% yoy). On the other end of the spectrum, the slowest rate of growth was in the real estate sector (+0.5% yoy).

According to Goodbody stockbrokers, "Yesterday’s wage figures, coupled with the first quarter employment data, highlight the strength of the Irish labour market. This will act as a boon to consumer spending, but in the context of Ireland’s dependence on FDI, the cost competitiveness issues of these wage pressures must be watched closely." 

Source: www.businessworld.ie