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UK salaries set to rise in 2019

  • UK professionals are expected to receive 0.8% real-terms salary increase in 2019, double the increase received in 2018 (0.4%)
  • Inflation forecast drops slightly in the UK but remains among the top ten in Europe
  • Ukraine tops the chart for the highest real salary increase forecasted in Europe (2.7%) and among the highest in the world
  • India tops the global chart for real salary increases, with a 5.1% rise

According to the latest Salary Trends Report by ECA International (ECA), UK employees in the private sector are expected to see a real salary increase of 0.8 percent in 2019, the equivalent of almost £20 a month (£237.35 per annum) for the average worker¹ before tax. This is following a better than expected salary increase for UK workers in 2018 (0.4 percent), originally forecasted to be among the lowest in Europe at 0.2 percent. 

The real salary increase is calculated based on the difference between the forecast nominal salary increase (3 percent in the UK) and inflation² (2.2 percent). 

The 0.8 percent salary rise that we’re expecting to see in 2019 is double what UK workers received last year. Although the UK’s nominal salary increase, at 3 percent, is expected to be among the highest in Western Europe, the real salary rise is in line with the European average because of higher inflation eating into workers buying power.

- Steven Kilfedder, Production Manager at ECA International

A significant factor which could impact these figures however, is the UK’s impending withdrawal from the EU. 

Kilfedder said “It is still very unclear what impact Brexit could have on inflation and salaries in the UK. Any deal that is made, or lack of it, could have far reaching implications on wage and price rises and these figures could change significantly depending on what happens between now and the official withdrawal date in March 2019.”
The annual Salary Trends Report from global mobility experts ECA International, analyses current and projected salary increases for local employees in 69 countries across the world. 

Positive signs of growth in Europe 

The average real salary increase across Europe is expected to be 0.8 percent, unchanged from 2018, while inflation in Europe is forecast to be the lowest in the world next year at 1.8 percent on average. 

After employees in Ukraine experienced a -0.9 percent decrease to their salaries in 2018, the improved inflation forecast in the country means that workers look set to receive a real salary increase of 2.7 percent – the highest in Europe next year. Ukraine is also the only European country to be in the top 10 for highest real salary increases in the world next year, and the only nation outside of the Asia-Pacific region.

Kilfedder explained “Despite the nominal salary increase in Ukraine remaining at 10 percent, as it was last year, there is expected to be a big drop in inflation from 10.9 percent in 2018 to 7.3 percent next year. This is good news for workers in Ukraine who will see their real-terms salary jump considerably, and the 2.7 percent forecast is easily the highest in Europe.”

Asian nations lead the way, as India employees receive highest pay increase in the world

Asian nations once again dominate the global top twenty highest wage increases. 14 of the top twenty, and all but one of the top ten, are Asian countries.

Kilfedder said “The average real salary increase in the APAC region is predicted to be 2.7 percent in 2019 – over double the global average of 1.2 percent. Low inflation and rising productivity mean that many Asian economies, and therefore local salaries, are growing rapidly.” 

India tops the rankings for 2019, where employees are forecast to receive a 5.1 percent real salary increase, over six times more than employees in the UK. 

Employees in the Americas face low pay increases due to higher inflation

Although employees in the United States are forecast to receive a slightly higher real pay rise than those in the UK (0.9 percent), it still falls below the average real salary increase in the Americas which is predicted to be 1.5 percent. Inflation in the Americas remains higher than average at 3.2 percent on average, compared with the global average of 2.3 percent.

However, employees in Peru look set to benefit from the lowest inflation in the region in 2019, making it the highest salary increase expected in the Americas at 2.5 percent. 

Argentina bottom of the table as economic woes continue

Argentina sits at the bottom of ECA’s table, with the forecast predicting a -8.7 percent decrease in the average real salary. This comes off the back of a -11.6 percent decrease in real salaries in 2018.

Kilfedder said “The bad news continues for workers in Argentina with another decrease in their real wages predicted for the coming year. The economic policies of President Macri, that were designed to reverse years of economic turmoil, have failed - resulting in an International Monetary Fund (IMF) bailout of over USD 56bn. With inflation set to remain sky-high at 31.7 percent, far outstripping salary increases, another decrease in Argentinian real salaries now looks inevitable.” 

High inflation continues to suppress pay increases in Africa, Middle Eastern outlook is mixed 

Although employers in Egypt, Nigeria and Turkey are expected to offer among the highest nominal pay increases next year, high levels of inflation mean employees in each of these countries will likely receive real pay decreases of 1 percent, 3.2 percent and 6.7 percent respectively. 

However, workers in Saudi Arabia and United Arab Emirates are expected to see a boost in 2019 compared to this past year as inflation in most parts of the Middle East looks set to ease. 

Kilfedder said “The real salaries in Saudi Arabia and the UAE look set to increase to 2.0 percent and 2.1 percent respectively after a disappointing 2018 which saw a drop in salary increases for both nations. This is a result of inflation easing after a short-lived spike last year following the introduction of a 5 percent VAT in January 2018.”

¹ Based on the median full-time weekly earnings of £569 published by the Office for National Statistics 
² Forecast inflation rates are from the International Monetary Fund's World Economic Outlook: October 2018. 
 
Top ten forecasted real salary increases - Global
Countries
Global ranking
Real salary increase 2019 (%)
India
1
5.1
Vietnam
2
4.9
Indonesia
3
4.2
China
4
4.1
Thailand
4
4.1
Bangladesh
6
3.9
Cambodia
7
3.4
Sri Lanka
8
3.2
Korea Republic
9
2.7
Malaysia
9
2.7
Ukraine
9
2.7
 
Top ten forecasted real salary increases - Europe
Countries
European ranking
Real salary increase 2019 (%)
Ukraine
1
2.7
Russia
2
2.3
Romania
3
1.8
Bulgaria
4
1.7
Irish Republic
5
1.3
Serbia
6
1.2
Germany
7
1.1
Italy
7
1.1
Netherlands
9
1.0
Norway
9
1.0

-ENDS-

Notes to Editors

About ECA’s Salary Trends Survey

The information above was taken from ECA's Salary Trends Survey 2018/2019. The survey reports current-year salary increases for local national employees and the anticipated increases for reviews in the forthcoming year. It is based on information collected from 289 multinational companies for 69 countries. Reports are available free to all participants or for purchase either as a set or individually per country for non-participants from the ECA website.

Data is based on increases including merit. Including merit is the total salary increase and represents general cost of living/inflationary increases plus performance/merit related increases. The data above was collected from August to September 2018. The survey included data from all seniorities across the following industry groups which included Energy, mining & petrochemicals; Chemical & pharmaceutical; Transport & logistics; Manufacturing & consumer goods; Legal & professional services; Engineering & technology; Retail, leisure & other services; Financial services; Non-profit.

About ECA International

ECA International is the market-leading provider of knowledge, information and technology that enables businesses to manage their international reward programmes.

Partnering with thousands of clients on every continent, we provide a fully-integrated suite of quality data, specialist software, consultancy and training. Our unparalleled insights guide clients as they mobilise their most valuable resource: people.

We make the complex world of international mobility simple, providing clients with the expertise and support they need to make the right decisions - every time.

ECA International: Mobility solutions for a world that’s constantly moving.

For further information, please contact:

Jack Firth 
Tel: +44 0 20 7351 5000
Email: Jack.Firth@eca-international.com 

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