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Published: 17/09/2024
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 earnings remains below other sectors
Construction wages, as measured by ONS’s Average Weekly Earnings dataset, increased by 4.3% in the year to July 2024. This was an increase on the 4.0% rise seen in the 12 months to June 2024 (revised upwards from 3.9%). On the month, earnings were up 0.3%.
Across the whole economy, the average increase in wages in the year to July 2024 was 4.8%, up from 4.7% in June.
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 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 private 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: ‘Construction earnings growth generally follows demand levels, with the trough following the first pandemic lockdown and the peak coinciding with the vaccination wave in mid-2021.
‘Earnings growth is currently flat given the slowdown in demand for construction and, until demand picks up, we are likely to see wage growth in construction stagnate.’
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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