Wage growth in the Republic eased to 3.7 per cent at the end of 2023, declining “in tandem with a gradually cooling labour market and falling rates of headline inflation”, according to the latest data.
The December wage growth report released by the Central Bank and jobs site Indeed shows that wages increased by 3.7 per cent year-on-year last month, a drop from an annual increase of 4.3 per cent in November.
The December growth rate was the slowest since the 3.6 per cent seen in April 2022 and was slightly lower than the 3.8 per cent recorded across the euro area in December. It was also below a rate of 6.6 per cent in the UK last month.
Pawel Adrjan, economist at Indeed, noted that wage inflation peaked at 5.5 per cent in the State in March.
“Irish wage growth has receded in tandem with the gradually cooling labour market and falling rates of headline inflation,” he said.
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Mr Adrjan noted that certain job categories in Ireland continue to see “brisk pay growth”, including architecture, which saw wages rise by 10.7 per cent in the year to December, while wages for driving rose by 7.8 per cent over the year, and information design wages increased by 6.3 per cent.
“Skill shortages are likely to remain a feature of the labour market in 2024, supporting wage increases in some sectors despite the overall softening in labour demand,” he said, adding that some employers continue to encounter hiring challenges.
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The full report examines wage growth trends in job ads in six euro-area states – France, Germany, Ireland, Italy, the Netherlands and Spain – and in the UK and US.
It found that annual wage growth in the euro area, UK and US slowed in the final months of 2023, and is expected to continue to moderate in 2024, approaching levels “more compatible with the European Central Bank’s and US Federal Reserve’s inflation targets”.
The latest consumer price index (CPI) published by the Central Statistics Office (CSO) on Tuesday put annual inflation in the State at 4.6 per cent in December, up from 3.9 per cent the previous month, but the second consecutive month since September 2021 that the annual inflation was below 5 per cent.
Figures from the CSO last week showed that there were 173,900 people on the live register in December, a fall of 11,639 compared to a year previously despite a rise in headline unemployment. The State’s unemployment rate rose to 4.9 per cent in the last month of 2023, up from 4.8 per cent in November and a low of 4.1 per cent earlier in the year.
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