Wages in the construction sector rose by 17.4 per cent in the 12 months to July 2015, according to data from Statistics Centre Abu Dhabi (Scad).
With inflation in the capital rising by approximately 5 per cent in the 12 months to June, the Scad data suggests that real wage growth in the construction sector stood at about 12 per cent last month. Inflation figures have not yet been published for last month.
Construction-sector employment accounts for just under a quarter of overall employment in the Emirate, according to Scad. The Ministry of Labour estimates that construction accounts for about a third of overall employment nationwide.
Last year, salaries in construction rose faster in percentage terms than salaries in the rest of the economy, according to data from Gulf Talent, an online recruitment portal.
Average salaries in the UAE grew by 6.2 per cent in 2014 – about half the pace of wage rises the construction sector.
Gulf Talent data shows that pay rises were biggest in construction in 2014. The company estimates that wages rose by 7.8 per cent in that sector across the country – slower than the trend for Abu Dhabi reflected in Scad data.
Monthly figures show wages rising for skilled tradespeople.
Surveyors saw the biggest increase in wages, rising 13.6 per cent to Dh25 per hour in July, up from Dh22 per hour the previous month. Blacksmiths’ and carpenters’ wages rose to Dh10 per hour in July, up from Dh9 per hour in June.
But salaries in construction tend to be lower than those in other sectors of the economy. That means that even large percentage increases in basic construction-sector salaries may lead to absolute changes that are smaller than those received in other industries.
Salaries for Indian expat construction workers increased by about 15 per cent per year between 2013 and 2015, construction site managers told The National this year.
Salaries in 2013 stood at about Dh1,200 for a typical Indian construction worker, and roughly Dh1,800 in March, site managers said. That was driven by increased economic growth in India, meaning that construction firms had to pay more to keep expat workers in the UAE.
Christopher Seymour, head of Middle East markets at the consultancy Arcadis, said: “The increases highlighted in the Scad report relate mainly to employment costs, which tend to be revised annually at half year, sometimes creating an apparent jump.
“The increases, however, are not seen in every group and while the effect on costs is definitely upwards, the effect on tender prices may be more muted.”
Wages were likely to slow as the government reduces spending on projects, Mr Seymour said. “The continuing downwards trend in commodity pricing and also the capacity of the construction market in Abu Dhabi will moderate the impact of the reported rises.”
business@thenational.ae
Follow The National's Business section on Twitter
