Workers throughout the Asia-Pacific region are waiting expectantly to see what 2017 will bring in terms of salary increases. While the economy itself is going through a slow period, employers are expected to raise wages by an average of 4%, without inflation, and 3.2% in real wages.
Wage Growth in Singapore
Although raises are certainly a welcome change, with the added level of inflation, Singaporeans will most likely see a 2.9% increase. This increase is actually less than that of the previous year. As deflation increases from 0.3 % to 1.1% in the coming year, employees in neighboring countries can expect to see a decrease from last year’s increase of 4.3%.
While the rise in real wages is less than the previous years, Singapore’s economy is still faring better than other areas in the Asia-Pacific Region that are averaging pay raises of only 2.6%, according to the ECA.
Vietnam and Japan Fare Better with Higher Salary Growth
Those in and around Vietnam should expect to have the largest growth in wages and salaries out of any of the countries in the Asia-Pacific region. Even with inflation, the Vietnamese economy will see a 5.4% increase in real wages. This is the highest increase across the board when it comes to the Asia-Pacific region. In Hong Kong, workers will enjoy a 4% rise in salaries, but with inflation factor in, that’s only a 1.4 % increase.
Salary Increases by Industry
As employees search for the highest salaries in any given country and occupation, one can clearly see a distinction by industry in terms of an increase in wages. The highest salary increase is expected for employees in the insurance industry at 4.5%. Consumer products workers can expect 4.4% increases as will employees of media companies, leisure and hospitality, as well as pharmaceutical and health sciences.
Coming in at a 4.3% increase is the consumer product retail industry, followed by retail companies that will see a 4.2% increase in wages. When it comes to companies that will see the lowest increases, energy and natural resources is expecting a 3.5% increase and banking companies will see a 3% increase.
Increase in Inflation Throughout Asia
As pay raises are notably taking a hit throughout the Asia-Pacific reason, workers and economic experts know that inflation is to blame. Inflation is largely being driven up by a decrease in demand for trade. The increase in inflation is in part a result of the slow in growth of the Chinese economy that has translated to a deceleration of Singapore’s economy as well as those of neighboring countries.
With higher labor costs and lower unemployment rates, the economies of countries within the Asia-Pacific region are experiencing a fiscal slowdown. This slowdown adds to the rising levels of inflation, which only makes matters worse for real wage increases.
As inflation will always affect the economy, keep in mind that the coming year still offers the potential for growth, both financially and professionally. Use this information to plan accordingly for the near future.