Take home pay index shows weak growth

Weak growth in manufacturing take home pay and slow growth in the service sector led to a decrease in the take home pay index produced by pay processors Vocalink. Their index figures are based on hard data rather than a survey.

Annual take home pay growth in the manufacturing sector fell back sharply to 0.8% during the three months to August, down from the previous month’s reading of 3.1%. This is the weakest growth rate since April 2011 and follows weak conditions in the industry.

The VocaLink Services Index also grew at a slower rate in the three months to July, rising over the year by 2.5%, down from 3.1% annual growth in July.

Overall, the annual rate of take home pay growth in the UK’s private sector decreased in July after four consecutive months of increases. Three-month annual growth on the VocaLink FTSE 350 Take Home Pay Index slowed to 2.3% in August, down from last month’s figure of 3.1%.

In the public sector, annual take home pay growth remained persistently low, at 0.6% during the three months to August. This is broadly unchanged from 0.7% the previous month but is well below levels of over 2.0% at the start of 2012, reflecting ongoing pay freezes in the public sector.

www.vocalink.com/media/433950/take_home_pay_index_sep2012.pdf