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Average weekly earnings in the construction industry

Published: 16/02/2024

The Office for National Statistics (ONS) publishes monthly updates on average weekly earnings across the whole economy and by industry and sector. This commentary relates to ONS’s EARN02 and EARN03 datasets, which cover non-seasonally adjusted earnings, excluding bonuses and including arrears. 

Growth in construction pay still lags behind other sectors 

Construction wages, as measured by  ONS’s Average Weekly Earnings dataset, increased by 3.7% in the year to December 2023. This compared with a rise of 3.9% in the 12 months to November 2023. On the month, earnings were down by 0.9%. 

Across the whole economy, the average increase in wages in the year to December 2023 was 6.2%, and 0.3% on the month. 

The construction index of non-seasonally adjusted earnings (K5AH) has been lower than the whole economy index (KA5H) since April 2020. 

Source: ONS – Construction (K5AH) and Whole economy (KA5H), non-seasonally adjusted average weekly earnings, excluding bonuses, including arrears 

Comparing pay at a sector level (with index K56S), construction workers saw the lowest annual increase in average earnings across all sectors, with 3.7%. All other sectors were up by over 6% in the same period.

Source: ONS – EARN02: Non-seasonally adjusted Average Weekly Earnings, excluding bonuses, including arrears, at sector level

The ONS data shows that the construction sector has experienced the most extreme fluctuations in earnings movement in recent years, from a 9.5% annual decrease in May 2020 to a 13.5% increase in May 2021. 

Source: ONS – EARN02: Non-seasonally adjusted Average Weekly Earnings, excluding bonuses, including arrears, at sector level

BCIS Chief Economist, Dr David Crosthwaite said: ‘The continued slowdown in demand, demonstrated this week in the latest output figures, means there is no upward pressure on wages.  

‘In the last quarter of 2023, overall construction output was down 1.3% and, within that, there was a 5% decrease in new work. 

‘As we don’t expect demand to recover for some time, labour availability isn’t likely to be as much of a problem and wages will remain fairly stable. 

‘With some promulgated wage increases taking effect last month, including for plumbers and electricians, we’re forecasting overall annual growth in the BCIS Labour Cost Index to be 8.1% in 1Q2024, but for it to decrease thereafter.’ 

BCIS produces five-year forecasts of the Average Weekly Earnings construction (K5AH) and whole economy (KA5H) time series for subscribers of BCIS Building Running Costs Online. 

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