Canadian employers expect salaries to rise by an average of 2.6 per cent in 2013,according to Morneau Shepell's annual Compensation — Trends and Projections survey. This is a 0.2 per cent drop from last year's survey.
The 2.6 per cent average includes expected salary freezes and excludes promotional or special salary adjustments. Respondents said projected base salary increases for 2013 are within the range observed last year, which was between two per cent and 3. 5per cent.
Overall, respondents appear to be less optimistic than last year in terms of growth and profitability at their organizations, especially in Alberta.
Respondents in the finance sector expect the greatest drop in salary increases, found the survey of more than 250 employers, with a forecast of 2.7 per cent increases for management and professionals in 2013, compared to 3.4 per cent last year.
"While insurance companies are hurt by low interest rates, growth prospects in the banking sector are dimmed by the anticipated weakness of the global economy and by the level of consumer debt in Canada," said Michel Dubé, principal at Morneau Shepell responsible for the survey. "We see this impacting salary increases for next year in the financial sector."
The overall expected average increase of 2.6 per cent is twice the inflation rate of theConsumer Price Index, which at the time the survey was conducted was 1.3 per cent. However, a rise in inflation in Canada is likely in the short run given current volatility in the petroleum industry, said MorneauShepell, and expected increases in food prices due to the worst drought the United States has seen in 50 years.
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