Feel-good factor hits home as wages rise

Upbeat statistics and a market rally are clearest signs yet of economic recovery

Feel-good factors came out in force yesterday with statistics showing the first increase in wages in 31/2 years, a four-year high on the stock market and a rise in the overall quality of life in the long-beleaguered city.

And in a strong indication of brighter times ahead for job seekers, a human resources seminar was told Hong Kong companies that have spent the past few years shedding staff were now having a hard time recruiting.

Government statistics released yesterday showed that average nominal wages - the amount actually paid to staff without adjustment for inflation - inched up 0.7 per cent in March compared with a year earlier.

It was the first year-on-year increase since a tiny 0.2 per cent rise in December 2001 and showed employees were finally beginning to share the spoils of rising profits and the general economic rebound.

'This is excellent news. We have been seeing stronger household balance sheets and solid employment growth. Now we have the missing link, which is nominal income growth,' said JP Morgan economist Ben Simpfendorfer.

All sectors benefited from higher wages apart from the financing, insurance, real estate and business services industries, which saw wages fall by 1.9 per cent. Wages for personal services rose most, at 2.1 per cent, followed by retail, trade and tourism at 1.3 per cent.