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Average weekly earnings in the construction industry

Published: 27/11/2023

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.

Construction pay lags behind wider economy 

Construction wages, as measured by ONS’s Average Weekly Earnings dataset, increased by 5.7% in the year to September 2023. This compared with a rise of 6.3% in the 12 months to August 2023. On the month, earnings were up by 0.5%. 

Across the whole economy, the average increase in wages in the year to September 2023 was 6.7%, and 0.4% 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 construction pay at a sector level (K56S), workers have seen among the lowest annual increases in average earnings. 

In September 2023, only public sector earnings went up by less than construction, compared to September 2022. 

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

The ONS data also 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 13.4% leap 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: ‘As the ONS figures suggest, we’ve seen huge volatility in average construction earnings and the recent trend of stalling wage growth is what we’d expect to see given the slowdown in demand. 

‘The latest output figures showed a slight overall increase in construction output in 3Q2023, with an overall drop in new work being buoyed by increased repair and maintenance output. 

‘We know there are labour shortages in the industry, but any effect of this is perhaps being masked at the moment by the reduction in activity, with workers able to plug the gaps where needed. The latest data from our Hays/BCIS Site Wage Cost Indices showed a further decrease in agency work placements in the sector and muted overall growth in pay. 

‘Provisional figures in the BCIS Labour Cost Index showed, after no monthly growth between July and September 2023, a 1% increase between September and October.’ 

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


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