Average weekly earnings in Great Britain: December 2019

Other commentary from the latest labour market data can be found on the following pages:

• Labour market overview

• Employment in the UK

• Vacancies and jobs

• Estimated annual growth in average weekly earnings for employees in Great Britain slowed to 3.2% for total pay (including bonuses) and 3.5% for regular pay (excluding bonuses).

• The annual growth in total pay was weakened by unusually high bonus payments paid in October 2018 compared with more typical average bonus payments paid in October 2019.

• In real terms (after adjusting for inflation), annual growth in total pay is estimated to be 1.5%, and annual growth in regular pay is estimated to be 1.8%.

• Annual growth in total pay remains weakest in the retail, wholesale, hotels and restaurants sector, at 2.3%, and the manufacturing sector at 2.7%.

The rate of pay growth has trended upwards since March to May 2017, reaching 3.9% in May to July 2019, the highest nominal pay growth rate since 2008. In August to October 2019, growth dropped to 3.2% for total pay and 3.5% for regular pay.

The growth in total pay is impacted downwards by unusually high bonuses having been paid in October 2018, whereas those in October 2019 are at more typical levels.

In real terms, annual pay growth has been positive since December 2017 to February 2018 and is now 1.5% for total pay and 1.8% for regular pay.

For October 2019, average regular pay, before tax and other deductions, for employees in Great Britain was estimated at £510 per week in nominal terms. The figure in real terms (constant 2015 prices) is £472 per week, which is still £1 (0.2%) lower than the pre-recession peak of £473 per week for April 2008.

The equivalent figures for total pay in real terms are £502 per week in October 2019 and £525 in February 2008, a 4.3% difference.

Between August to October 2018 and August to October 2019, average pay growth varied by industry sector:

• construction saw the highest estimated growth at 5.0% for total pay and 5.4% for regular pay

• retail, wholesale, hotels and restaurants saw the lowest growth, estimated at 2.3% for total pay and 2.5% for regular pay; this is the sector with the lowest average weekly pay (£339 regular pay compared with £510 across the whole economy)

The pattern of higher growth in construction, and finance and business services, and lower growth in manufacturing and wholesaling, retailing, hotels and restaurants has been evident throughout 2019.

Between August to October 2018 and August to October 2019, public sector annual total pay grew by 3.1%, down from 4.0% in April to June 2019.

This public sector pay growth pattern is affected by the timing of NHS pay rises which saw some April 2018 pay increases not being paid until summer 2018. As a result, public sector pay estimates for the months April to July 2019 include two NHS pay rises for 2018 and 2019 when compared with 2018. In addition, the single month of April 2019 included a one-off payment to some NHS staff.

Outside of months in 2019 when its pay growth was impacted by the timing of NHS pay rises, the public sector has experienced consistently lower pay growth than the private sector since September 2014.

Average weekly earnings

Average weekly earnings (AWE) is the lead monthly measure of average weekly earnings per employee. It is calculated using information based on the Monthly Wages and Salaries Survey (MWSS), which samples around 9,000 employers in Great Britain.

The estimates are not just a measure of pay rises as they do not, for example, adjust for changes in the proportion of the workforce who work full-time or part-time, or other compositional changes within the workforce. The estimates do not include earnings of self-employed people.

Estimates are available for both total pay (which includes bonus payments) and for regular pay (which excludes bonuses). Estimates are available in both nominal terms (not adjusted for inflation) and real terms (adjusted for inflation).

Bonus

A bonus is a form of reward or recognition granted by an employer. When an employee receives a bonus payment, there is no expectation or assumption that the bonus will be used to cover any specific expense. The value and timing of a bonus payment can be at the discretion of the employer or stipulated in workplace agreements.

Consumer Prices Index including owner occupiers’ housing costs (CPIH)

As of 21 March 2017, the Consumer Prices Index including owner occupiers’ housing costs2 became our lead measure of inflation. It is our most comprehensive measure of UK consumer price inflation.

Monthly Wages and Salaries Survey (MWSS)

The Monthly Wages and Salaries Survey (MWSS) is a survey through which we collect information on wages and salaries. It is distributed monthly to around 9,000 employers covering around 12.8 million employees.

A more detailed Glossary is available.

This bulletin relies on data collected from the Monthly Wages and Salaries Survey, a survey of employers in Great Britain excluding small businesses employing fewer than 20 people.

The Quality and Methodology Information (QMI) report pulls together important qualitative information on the various dimensions of data quality, as well as providing a summary of the methods used to compile the output.

The figures in this bulletin come from a survey of businesses, which gathers information from a sample rather than from the whole population. The sample is designed to be as accurate as possible given practical limitations such as time and cost constraints. Results from sample surveys are always estimates, not precise figures. This can have an impact on how changes in the estimates should be interpreted, especially for short-term comparisons.

As the number of people available in the sample gets smaller, the variability of the estimates that we can make from that sample size gets larger. Estimates for small groups (for example, earnings for the construction sector), which are based on quite small subsets of the Monthly Wages and Salaries Survey sample, are less reliable and tend to be more volatile than for larger aggregated groups (for example, earnings for the private sector).

In general, short-term changes in the growth rates reported in this bulletin are not usually greater than the level that can be explained by sampling variability. Short-term movements in reported rates should be considered alongside longer-term patterns in the series, and corresponding movements in other sources to give a fuller picture.

Further information is available in A guide to labour market statistics and A guide to sources of data on earnings and income.