Average weekly earnings in Great Britain: April 2020

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

• Average weekly earnings estimates presented in this bulletin cover the survey reference period ending February 2020, prior to the implementation of the coronavirus (COVID-19) social distancing measures.

• Estimated annual growth in average weekly earnings for employees in Great Britain in the three months to February 2020 was 2.8% for total pay (including bonuses) and 2.9% for regular pay (excluding bonuses).

• Pay in February 2020 continued to grow faster than inflation, but its rate of growth has slowed since mid-2019.

• In real terms (after adjusting for inflation), annual growth is estimated to be 1.2% in total pay and 1.3% in regular pay, both down from a recent peak of 2.0% in the three months to June 2019.

• Annual growth in total pay is weakest in the manufacturing sector at 2.0%.

The rate of pay growth trended upwards from spring 2017. In April to June 2019, it reached 4.0% for total pay and 3.9% for regular pay, the highest nominal pay growth rates since 2008. However, since then growth has slowed. In December 2019 to Febraury 2020, it stood at 2.8% for total pay and 2.9% for regular pay.

In real terms, annual pay growth has been positive since the three months to February 2018. This means that during that period, pay has been growing faster than inflation. Growth in real terms for both total pay and regular pay reached a recent peak of 2.0% in the three months to June 2019, before decreasing to 1.2% for total pay and 1.3% for regular pay in the three months to February 2020.

For February 2020, average regular pay, before tax and other deductions, for employees in Great Britain was estimated at £511 per week in nominal terms. The figure in real terms (constant 2015 prices) is £471 per week, which is £2 (0.4%) less than the pre-2008 economic downturn peak of £473 per week for March 2008.

The equivalent figures for total pay in real terms are £501 per week in February 2020 and £522 in February 2008, a 4% difference.

Between December to February 2019 and December to February 2020, average pay growth varied by industry sector (Figure 3). The public sector saw the highest estimated growth, at 3.3% for total pay and 3.2% for regular pay. The manufacturing sector saw the lowest growth, estimated at 2.0% for total pay and 2.1% for regular pay.

As these estimates are based on a sample, they are subject to sampling variability, which in the case of manufacturing is approximately 0.9% (Table 1).

Despite having lower than average pay recently, the wholesaling, retailing, hotels and restaurants sector and manufacturing have seen stronger growth in total pay since 2008 than for any other sector. This industry sector analysis over time was explored in more detail in the previous release.

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 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

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

Monthly Wages and Salaries Survey

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.

Coronavirus (COVID-19)

In response to the developing coronavirus (COVID-19) pandemic, we are working to ensure that we continue to publish economic statistics. For more information, please see COVID-19 and the production of statistics.

We have reviewed all publications and data published as part of the labour market release in response to the COVID-19 pandemic. This has led to the postponement of some publications and datasets to ensure that we can continue to publish our main labour market data. This will protect the delivery and quality of our remaining outputs as well as ensuring we can respond to new demands as a direct result of COVID-19.

Ahead of the latest labour market statistics release, David Freeman, head of labour market statistics at the Office for National Statistics (ONS), has looked at how the ONS is responding to the pressing need for new information in his blog, Measuring the labour market during Coronavirus.

For more information on how labour market data sources, among others, will be affected by the COVID-19 pandemic, see the statement published on 27 March 2020.

Data in this statistical bulletin and accompanying datasets relate to periods up to and including February 2020 and are largely unaffected by recent developments.

Our latest data and analysis on the impact of COVID-19 on the UK economy and population is now available on our dedicated COVID-19 webpage. This will be the hub for all special COVID-19-related publications, drawing on all available data.

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our labour market statistics in line with the UK Statistics Authority’s Code of Practice for Statistics and in accordance with International Labour Organization (ILO) definitions and agreed international statistical guidance.

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

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Average weekly earnings QMI.

The figures in this bulletin come from a survey of businesses that 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 small subsets of the Monthly Wages and Salaries Survey (MWSS) 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.