The Executive Connection CEO quarterly survey has revealed mixed news for Australia, with suggestions workers won’t get a pay bump despite an improving Australian economy.
Bad news for workers
Times of low wage growth look set to continue as the survey of Australian CEOs showed that just 14 per cent of employers are planning on giving workers a 4 per cent increase in wages.
More than 37 per cent plan to keep wages steady or adopt a minimal increase of 0 to 2 per cent and a third are expecting to pay wage rises of 2 to 3 per cent. Overall, two-thirds of CEOs are expecting wage increases of less than 3 per cent.
To attract key personnel, 66 per cent of CEOs are planning to offer flexible working conditions and 58 percent are improving company culture. In addition, professional development programs, reward programs, enhancing employee benefits and career path planning will be utilised by Australian CEOs.
Positive news for the economy
Business leaders’ confidence in the economy has rebounded strongly, as the confidence index rose by 16 points in the September quarter to 113, rising back above the positive/negative 100 point level. Expectations of the economy for the year have jumped 27 points to 107.
According to TEC economic advisor Warren Hogan, there is mounting evidence that Australia’s economy has turned the corner through the middle of 2019. At the very least, it appears that the deterioration of economic activity witnessed in middle 2018 has been arrested.
Australia is less likely to drift into a recession due to political certainty, lower interest rates and the buoyancy of financial markets.
The stabilisation of house prices is critical to shoring up consumer confidence and boosting their willingness to spend as lower wage growth and falling house prices has spooked Australians in the past 12 months.
In contrast to survey results Governor Lowe has suggested this low interest environment will improve wage growth in Australia.
Cameron Micallef is a journalist at Nest Egg, writing primarily about personal wealth and economic markets.
Prior to this, Cameron worked for Australian Associated Press. He graduated from the University of Wollongong with a double degree in communications and commerce.