Wages are growing at their weakest rate in almost two decades, adding weight to the perception that incomes are falling behind the cost of living.
Annual wages growth slipped to just 2.2 per cent in 2015, the slowest since the Australian Bureau of Statistics introduced its wage price index in 1997.
It was only just above a benign inflation rate of 1.7 per cent.
The latest Essential Research survey found just over half of its respondents believe their income has fallen behind the cost of living.
Shadow treasurer Chris Bowen calculated living standards have fallen by 3.5 per cent since the coalition came to power in September 2013.
“Instead of delivering a long-term economic plan that will increase living standards, the coalition has preferred to increase the cost of living through its attack on penalty rates and slashing family tax benefits for low-income households,” he said in a statement.
ANZ economist Justin Fabo expects wages growth will likely remain subdued for a while yet, given the relatively high level of unemployment, low-inflation expectations and downward pressure on national income from a declining terms of trade.
Growth in mining and construction wages are now among the slowest, even falling behind those in the accommodation and food services sectors – the reverse of just a few years ago when the resources investment boom was in full flight.
Other figures show how this now fading investment has hit engineering construction, dropping a hefty 9.5 per cent in the December quarter to be 14.7 per cent down on the year.
Engineering work has now dropped by around a quarter in the past three years.
Engineers Australia chief executive Stephen Durkin says the figures reflect Australia’s “big project mentality”.
“We need to get out of the boom/bust cycles. We need proper planning,” he said.
Commonwealth Bank economist Gareth Aird says declining mining investment will still be a drag on economic growth this financial year.
But its negative impact will wane, he said.
The gloomy result was partly offset by a 2.8 per cent rise in residential construction work during the final three months of 2015 to be 11.5 per cent higher than a year earlier.
Mr Aird said forward-looking indicators suggest such strength will continue deep into 2016.
More up-to-date Department of Employment figures showed job advertisements on the internet increased 5.3 per cent in the year to January.
“That … shows the government’s goal of job creation to boost the economy is well on track,” Employment Minister Michaelia Cash said.