Agriculture and services sectors push private sector wages up

The wages of the private sector gained in July led by the agriculture and services sectors, defying the expectations that the coronavirus-related economic damage could leave jobs and wages depressed for a prolonged period.

The nominal wages in the informal private sector employees increased by 3.1 percent in July, from a year earlier period, accelerating from a 2.2 percent growth seen in June, the data from the Central Bank showed.

The relatively strong nominal wage growth is also a result of the lower base prevailed during July 2019, as the jobs and wages, particularly in the services sector, depressed post-easter attacks and the drought conditions that prevailed around the same time.

Growth in nominal wages decelerated to 1.7 percent in May, reaching the lowest level for 2020, as a considerable number of private sector employees were temporarily laid off and others saw their wages cut, as companies were trimming costs to ride the pandemic.

July wage growth was led by the agriculture and services sectors recording the most gains. The agriculture sector wages rose by 4.0 percent from the same period, last year, while the services sector wages logged a stronger 4.5 percent gain from the same month in 2019. The industry sector wages gained by 1.3 percent. Despite making gains, wage growth remained under the inflation, keeping the real wage index below the Colombo Consumer Price Index (CCPI). The prices measured by the CCPI rose by 4.2 percent in July and 4.1 percent in August on a year-on-year basis, leaving the real wage index continuously below that of the headline inflation of the country. Meanwhile, the public sector wages rose by 5.7 percent in July, from the same month in 2019.