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Average weekly earnings in the construction industry

Published: 18/06/2024

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

Annual growth in construction slower than other sectors

Construction wages, as measured by ONS’s Average Weekly Earnings dataset, increased by 3.1% in the year to April 2024. This was an increase on the 2.4% rise seen in the 12 months to March 2024. On the month, earnings were up by 1.0%.

Across the whole economy, the average increase in wages in the year to April 2024 was 5.7%, which was a 1.4% increase compared with March 2024.

The construction index of non-seasonally adjusted earnings (K5AH) has been lower than the whole economy index (KA5H) since April 2020. Annual growth in earnings has been lower in construction than the whole economy average each month since April 2023.

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, at 3.1%. All other sectors were up by over 5.5% 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

Dr David Crosthwaite, Chief Economist at BCIS, said: ‘The average earnings figures captured in this dataset show there still isn’t much upward pressure on construction wages, which tallies with the output data covering the same period.

‘At the moment, a subdued construction market is going hand in hand with a depleted workforce. As we have been saying throughout this period of reduced demand, when output picks up again, employers may find they have to pay more to secure the labour they need for their projects.

‘We can see in the Hays/BCIS Site Wage Cost Indices, which track agency labour, that the bigger pay increases have been seen among the more skilled roles.’

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

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