Finance & Management News
Central Bank and Indeed research indicates wage growth increase in early 2022
The Central Bank of Ireland has published an Economic Letter “Wage Growth in Europe: Evidence From Job Ads”. It draws on data from millions of job postings on Indeed to present a new monthly wage growth tracker, examining trends in posted wages across France, Germany, Ireland, Italy, the Netherlands, Spain, and the UK.
The Letter finds that posted wage growth accelerated sharply in the first half of 2022 before easing slightly in the third quarter. In the six-euro area countries analysed, wage growth reached 5.2% year-on-year in October, more than three times the pre-pandemic rate, while growth in the UK was 6.2%, double the pre-pandemic rate, and appears to have peaked at this level. For individual euro area countries, October wage growth was highest in Germany (7.1%), followed by France (5.0%), Ireland (4.7%), Italy (4.2%), Netherlands (4.0%) and Spain (3.5%).
Early signs are that wage growth in job ads has plateaued at these historically high levels and actually fallen in some countries. Combined with gradually declining job postings in certain countries, this suggests that some employers are starting to rethink their demand for labour as they balance the currently tight labour market against an increasingly uncertain and deteriorating economic outlook.
The Letter also looks at whether wage growth in 2022 is a broad-based phenomenon or if it is limited to a smaller share of sectors where supply and demand imbalances may be a factor. At the low point of the pandemic in 2021, around 30-40% of occupations in euro and the UK were seeing posted wage growth of at least 3%. As of October 2022, these shares had increased to over 60-80%. The pre-pandemic share was 40%.
Occupations seeing the fastest wage growth across all countries include community and social services; cleaning and sanitation; food preparation and services; driving; customer service; loading and stocking; retail; childcare; sales; and installation and maintenance.
Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar, and Michael McGrath, Minister for Public Expenditure and Reform have announced details of the new €200 million Ukraine Enterprise Crisis Scheme.
There will be two streams of funding under the Scheme to assist viable but vulnerable firms of all sizes in the manufacturing and internationally traded services sectors. The first stream will assist firms suffering liquidity problems as a result of Russia’s war on Ukraine, and the second stream will also help those impacted by severe rises in energy costs.
The Tánaiste also confirmed that the Cabinet has approved the publication of legislation to unlock up to €1.2 billion in low-cost loans to SMEs and small mid-caps (up to 500 employees) under the Ukraine Credit Guarantee Scheme. It will open before the end of the year and provide low-cost unsecured working capital for SMEs and primary producers to help them to spread the increased input costs and limit disruption to supply chains.
Remote Working Guidance
The Department of Enterprise, Trade and Employment has included on its website guidance on working remotely to assist workers and businesses.
The website acts as a central access point bringing together State guidance, legislation, and advice in a single location. It is a live resource which is regularly updated as new guidance is published.
In a speech at the Annual Donal Levin Lecture, Sharon Donnery, Deputy Governor, Central Bank of Ireland, and Member of the Supervisory Board of the ECB, outlined her perspective on what is driving the high levels of inflation currently being experienced, how labour market developments might influence the inflation outlook, and finally what all of this means for monetary policy.
To view the speech please visit www.centralbank.ie