Sunday, November 11, 2012

S'pore's 2013 pay rises to be mostly flat after inflation: Study

ANY pay increases reaped by local professionals next year could largely be eroded by inflation - an outcome that would put Singapore bottom in the region for real wage rises.

Local companies plan to give their employees a 4.5 per cent salary rise next year, according to a study by global human resources consultancy ECA International, but the International Monetary Fund (IMF) expects inflation here to be 4.3 per cent.

This means real incomes - a measurement of purchasing power taken by adjusting wages for inflation - will rise a paltry 0.2 per cent.

"This continues the pattern already seen this year whereby employees in Singapore have, on average, experienced no increase in real terms," said ECA in a statement.

This year, companies gave staff an average pay rise of 4.5 per cent. With the IMF's inflation figure, also of 4.5 per cent, it means workers are no better off.

The fact that wage rises will be similar for two years reflects continued uncertainty among companies about their financial performance, said Mr Lee Quane, regional director for Asia at ECA.

He added that Singapore's real wage situation "contrasts dramatically" with other developed economies in the region.

Salary increases in Australia were 4 per cent this year - less than here - but lower inflation means staff Down Under enjoyed a 2 per cent rise in real income.

Salary rises for the Asia-Pacific region next year are forecast to be 6.2 per cent. With inflation expected to run at 3.5 per cent, real wages for the region are expected to rise 2.7 per cent.

In terms of expected real wage rises next year, Singapore places bottom on a list of 14 regional economies that include Australia, Japan, Hong Kong and Malaysia.

Hong Kong's wage rise is expected to be 4.5 per cent next year. With inflation at 3 per cent, real wages will rise 1.5 per cent.

The study of white-collar wages surveyed 322 companies around the world, including 140 here, from sectors such as logistics, manufacturing, banking and retail.

Mr Quane said from 2007 to this year, Singapore wages rose by 20 per cent, but real income was up only 0.4 per cent in the period.

United Overseas Bank economist Francis Tan told The Straits Times: "Inflation is going to remain stubborn for next year, and real wages will remain flat."

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