The pay divide between engineers in the North and the South of the UK has narrowed since the financial crisis, according to an analysis by Brookson, a provider of accountancy services to engineering contractors.
According to the pay gap data, engineers in the North of England (North West, Yorks & Humber and the North East) now earn on average just 8% less than their Southern counterparts.
Median pay for engineers in the North has risen by 9.9% since 2009, from £34,091 to £37,455, compared to 8.3% for engineers in the South (South West, South East, London and East of England), from £37,487 to £40,608.
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Managing director of Brookson, Martin Hesketh explained: “Demand for engineers in London and the South East tends to be dominated by mega projects such as Crossrail, which are publicly funded and focused on the domestic market.
“The North has seen a boom in the aerospace and automotive sectors, aided by the devaluation of the pound which has boosted exports.”
“The increased availability of export finance, together with government export credit guarantees, has allowed many engineering and manufacturing business to win contracts overseas that they might have struggled to secure previously. UK carmakers achieved record exports last year, with the Nissan plant in Sunderland leading the way.”
He added: “As ever, skills shortages threaten to put the break on the accelerating exports of the UK automotive sector. Companies are reporting difficulties finding design and production engineers, and are making greater use of contractors to plug skills gaps.”
West Midlands engineers see highest pay rises since financial crisis
According to the Brookson research, pay for engineers based in the West Midlands has risen fastest since 2009 at nearly the double the rate of London, the second placed region.
Pay for engineers in the West Midlands jumped by 22.9% between 2009 and 2015, from £33,088 to £40,677, making them now the highest paid outside London and Scotland, having been among the lowest paid in 2009.
Pay for engineers in London increased by 13.8% since 2009, from £39,429 to £44,874.
Shortages of engineering skills are reportedly greatest in the West Midlands as the automotive sector, including companies such as Jaguar Land Rover, post record sales and ramp up investment and production.
Hesketh said: “There has been a surge in demand for engineers in the West Midlands as carmakers continue to increase output. In many cases, they are recruiting engineers from their supply chain, which is triggering bidding wars as suppliers seek to retain skills.
“The big carmakers tend to get the skills they need, leaving those businesses lower down the supply chain struggling.”
“The talent pipeline isn’t being replenished fast enough to keep pace with demand. The number of engineering apprenticeships being created in the West Midlands has been in decline over the past few years, and has only started to recover in the past year. This is forcing growing numbers of engineering businesses to recruit from overseas.”
Engineering contractors earning more than double the amount of engineering employees
According to Brookson, engineering contractors on average earn more than double their full-time counterparts. Brookson analysed rates for more than 450 engineering contractors across the UK and found that average annual gross pay was £87,792 compared to £39,715 for full-time engineering employees.
The firm pointed out, however, that engineers who operate through their own companies tend to be on average more experienced and/or have higher value skills. They also pay less tax than full-time equivalents, which means that their take-home pay is a higher proportion of their gross income.