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Wage growth was optically raised by comparison base

Company: Komerční banka, a.s.

The average gross monthly wage increase 11.3% in nominal terms in the second quarter, and 8.2% in real terms. It thus exceeded our and market expectations. Conversely, the central bank, which expected nominal wage growth of 12%, may be satisfied with its estimate. However, wage developments were significantly affected by last year's low comparison base. After seasonal adjustment, wage growth reached only 1.2% in a qoq comparison, which can certainly not be considered rapid dynamics. In addition, the payment of extraordinary rewards in healthcare largely contributed. The median wage in the second quarter was CZK32,408.kom


Wage growth in the second quarter was mainly driven by the public sector. It accelerated there from 4.9% yoy in the first quarter to 17.7% yoy in the second quarter. This development was mainly due to the health and social care sector, where extraordinary bonuses for work during the pandemic were paid, which contributed to wage growt of almost 44% yoy in this sector.

In the private sector, wage growth in 2Q reached 8.8% yoy. In the heavily weighted manufacturing industry, wages rose a significant 11.3% yoy after the 2% recorded in the first quarter. At the same time, the manufacturing sector was recruiting some workers as the decline in employment eased from 2.5% to 0.6%. Wages in the hospitality and accommodation sector also increased significantly (17.3% yoy), which, however, can probably be mostly attributed to the low statistical base related to the lockdown in this sector. Wages in real estate activities and administrative activities also grew significantly (15.4% yoy, 12.3% respectively). On the other hand, the only sector where wages fell was the financial and insurance sector.

For the whole of this year, we forecast the average wage to growth of 4.8% in nominal terms and 2.2% in real terms. The Czech National Bank is again slightly more optimistic in this respect, expecting a nominal increase of 5.4% and real of 2.4%. Overall, today's data fit into our puzzle that the CNB will raise interest rates by 25 basis points in September and another 25 basis points in November. From our point of view, today's data did not provide a special reason for more significant tightening of monetary conditions at the September meeting.


Jana Steckerová

Economic and Strategy Research

Komerční banka



Tags: Economics | Finance | Human Resources |

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