The improved outlook for 2026 reflects the still solid momentum from 2025, but also a change in fiscal policy that is likely to result in both stronger public sector wage growth and sustained through stronger labour market demand. This, and a slowdown in consumer prices, translates into a stronger outlook for real wage growth, up 4% this year (better by 0.7ppts from the previous outlook) after a 4.4% rise last year, and we expect slower growth of 2.9% for 2027. However, the "real" impact of the consumer price spike on real wage dynamics in 2026 and 2027 will be influenced by the timing of energy bill settlements, which may actually imply a possible smaller spike in real wages.
Source of primary data
CZSO, CBA
Note
"Actual" and "CBA forecast" represent the full-year average and "actual ytd" is the average for the year to date. Data unadjusted for working day differences and seasonal effects. The dashed line 'middle band of 25-75% of forecasts' represents the middle half between the 25th and 75th percentile of all forecasts in the CBA consensus.