The Australian Bureau of Statistics said its wage price index rose 0.7 per cent in the December quarter, to be 2.3 per cent higher than a year earlier and up from 2.2 per cent as of the September quarter.

The ABS said annual wage growth has continued to steadily rise from the record low of 1.4 per cent seen at the tail-end of 2020, when the economy was recovering from the first recession in nearly 30 years.

But wage growth is still lagging the rate of inflation which currently stands at 3.5 per cent.

"This confirms again that Scott Morrison is the prime minister for higher prices, lower real wages, and working families going backwards," shadow treasurer Jim Chalmers told AAP.

"The PM and treasurer's self-congratulation over the recovery rings hollow when working families in real communities are falling behind."

The ACTU calculates Australians on the average income of $68,000 effectively received a pay cut of $832 last year.

"Workers experienced the worst real terms wage cut in 20 years, and Scott Morrison has no answers," ACTU secretary Sally McManus said.

But Australian Chamber of Commerce and Industry chief executive Andrew McKellar said it is critical that increased productivity drives wages growth in 2022.

"The reality is our productivity performance remains concerning," he said.

"Until we improve our economic efficiency, we won't see the stable and sustainable increase to wages the community expects."

Annual wage growth also stands well short of the three per cent-plus Reserve Bank of Australia governor Philip Lowe wants to see before lifting the cash rate from a record low 0.1 per cent.

"There are some positive signs in these data that wage growth is picking up in response to stronger economic conditions," BIS Oxford Economists head of macroeconomic forecasting Sean Langcake said.

"But progress is slow and wage growth is still well below the pace the RBA sees as consistent with sustainable inflation in line with its target."

As such, he doesn't expect the first rate hike will come in the final three months of 2022.

ABS head of price statistics Michelle Marquardt said the proportion of pay rises reported over the December quarter was higher than usually seen at this time of year.

"The implementation of the last phases of award updates and state-based public sector enterprise agreements, on top of a rising number of wage and salary reviews, drove wages up 0.7 per cent over the quarter," she said.

Meanwhile, construction work completed in the December quarter unexpectedly declined 0.4 per cent, when economists had expected a rebound from the Delta lockdown-induced fall in the September quarter.

Total construction was $53.5 billion in the quarter.

Building construction declined 1.3 per cent to $30.4 billion, reflecting a 2.9 per cent drop in residential activity, but a 1.3 per cent rise in non-residential building.

Engineering rose 0.7 per cent to $23.1 billion.

The data feeds into the December quarter national accounts due for release on March 2.

Australian Associated Press