SLOVAKS should be feeling richer according to new official statistics.
Average monthly wages increased by 7.2 percent between 2006 and 2007, to Sk20,146, while real wages, adjusted for inflation, grew by 4.3 percent, the Slovak Statistics Office has reported. Market watchers attribute the increase to robust economic growth, which last year stood at 10.4 percent.
"The main factor that allows wages to swell is the fast economic growth and, mainly, the growth in labour productivity," Martin Lenko, an analyst with VUB Bank, told The Slovak Spectator.
Last year, labour productivity went up by 8.1 percent, compared to only 6.1 percent in 2006, he noted.
According to Lenko, this is a healthy development, given that the increase is almost double that of real wages, hence making only a minor contribution to the growth in demand and to inflation.
Richard Ďurana, director of the Institute of Economic and Social Studies (INESS) agrees that wage growth has healthy drivers.
Ďurana told The Slovak Spectator that investment and the lack of qualified labour, which pushes companies to compete for employees by offering higher wages, also play a significant role in wage growth here.
However, according to an analyst with ING Bank, Eduard Hagara, it is the lack of qualified labour which, within the next two to three years, might change the balance between the growth in productivity and the growth in wages.
"The declining availability of qualified labour should put pressure on wage growth even slightly beyond the growth of labour productivity and could result in inflationary pressures," Hagara said.
In the last quarter of 2007, the average monthly nominal wage stood at Sk22,925, up 8 percent year-on-year. Real wages rose by 4,5 percent.
The average wages were highest in the financial services sector during the last quarter, standing at Sk38,632, while the electricity, gas and water supply sectors paid average monthly salaries of Sk35,490. Average wages in the public administration and defence sectors stood at Sk31,236; in real estate and rentals at Sk29,110; while in transport and telecommunications they were Sk24,746. Hotels and restaurants paid the lowest average monthly wages of Sk16,485, the Statistics Office reported.
The healthcare and social services reported the highest average wage growth in the last quarter: 17.2 percent. In electricity, natural gas, and water distribution wages grew at 16.5 percent, and in social and personal services at 10.7 percent, according to the Statistics Office figures.
During the same period, the farming and fishing sector reported a wage increase of 10 percent, closely followed by mining at 9.7 percent. The general government and defence sectors reported 9.3 percent growth. Wage growth was slowest in industrial manufacturing, at 4.5 percent, and hotels and restaurants, at 5 percent.
Marta Ďurianová contributed to this report.
