Salaries expected to increase by 2.3% in 2018

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Employers in Canada are expecting salaries to rise by an average of 2.3% in 2018, according to Morneau Shepell’s annual survey of Trends in Human Resources. This is up from the actual 2.2% average increase in 2017. The forecast for 2018 includes expected salary freezes and excludes promotional or special salary adjustments.

“Employers are relatively optimistic about the coming year,” said Michel Dubé, a principal in Morneau Shepell’s compensation consulting practice. “Those expecting better financial performance in the coming year outnumber those expecting weaker performance by four to one. Despite this optimism, employers are still cautious about salary increases, perhaps reflecting a concern that rising interest rates may dampen economic growth next year.”

The expected 2.3% increase compares favourably to the current rate of inflation, which is about 1.0%.

The survey identified some industry sectors that are expecting higher than average salary increases in 2018. They include utilities at 2.9%, and manufacturing and wholesale trade at 2.7%. These industries may be catching up after lower than average increases over the past few years. Expected salary increases in sectors such as finance and insurance are expected to remain strong at 2.7%next year.

Lower than average increases are expected in certain industry groups that face more uncertain economic circumstances. This includes mining and oil and gas extraction where average salary increases of 0.8% are expected. Salary increases in the public sector are also expected to be below average. Salary increases in public administration, health care and social assistance employers are expected to average 1.7% next year, with educational services slightly higher at 1.9%.

Reflecting the different mix of industries by province, Alberta and Prince Edward Island are expected to have the lowest salary increases next year, at 1.8 and 1.9%respectively. Quebec is expecting the highest salary increases next year, at 2.6%. Salary increases in other provinces will be close to the norm.

Transcontinental Media G.P.