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 earnings rises over 4%
Construction wages, as measured by ONS’s Average Weekly Earnings dataset, increased by 4.2% in the year to August 2024. This was a decrease on the 4.7% rise seen in the 12 months to July 2024 (revised upwards from 4.3%). On the month, earnings were down 0.6%.
Across the whole economy, the average increase in wages in the year to August 2024 was 4.5%, down from 4.9% in July.
Annual growth in earnings has been lower in construction than the whole economy average each month since April 2023, although recently they appear to be converging as earnings growth in the wider economy declines.
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 second lowest annual increases in average earnings across all sectors. The biggest annual increases were seen in manufacturing, in wholesaling, retailing, hotels and restaurants, and in the public sector.
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
David Crosthwaite, Chief Economist at BCIS, said: ‘While growth in wages in the whole economy has been falling for over a year, in construction the sector is still experiencing some uplift in wages, although both seem to be reverting to their pre-pandemic levels.
‘Construction earnings growth is now at parity with earnings growth in the whole economy and may well exceed it as labour shortages become more apparent as demand picks up.’
BCIS produces five-year forecasts of the Average Weekly Earnings construction (K5AH) and whole economy (KA5H) time series for subscribers of BCIS OpX.