Site labour rates have hit an all-time high in London as pay across the country continues to rocket.
Analysis by construction payroll specialist Hudson Contract showed average weekly earnings increased by 1.8% to £944 in November – the highest pay levels on record.
Compared with the same period last year, earnings increased by 4.7% while earnings in the capital rose 6.1% to hit £962 a week.
Ian Anfield, managing director, said: “Our analysis shows we are back in the normal cycle where the industry as a whole works more hours in the run-up to Christmas.
“Storm Barra may have lost us a few days and contractors are fighting to get the materials they need but we are still within the most productive time of the year. The festive season is coming up and people know January will be slow with bad weather.
“The strong performance in the South West and Wales reflects the increasing investment in housing and infrastructure as part of the government’s ‘levelling up’ agenda.
“In London and the South East, growing demand for new housing and home improvements is feeding through to labour requirements and rates are catching up.
“Looking ahead, the removal of the red diesel rebate in April will hit groundworks contractors and quarrying companies the hardest and likely drive up material prices across the construction industry.
“The smaller and more agile firms on short-term contracts are able to react quickly and put their rates up as are the self-employed.”
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Construction output fell 1.8% in October representing the largest monthly decline since the pandemic sent construction off a cliff edge in April 2020.
New work fell 2.8% from September to October while repair and maintenance remained unchanged.
At the sector level, the main contributors to the decline in monthly output were infrastructure and private new housing, which decreased 7.1% and 4.4% respectively.
These falls were partially offset by increases in private industrial and public other new work of 9% and 7% respectively.
Anecdotal evidence suggests that product shortages caused by supply chain issues leading to subsequent price rises in raw materials such as steel, concrete, timber and glass, were an important reason for the decline.
The latest fall meant the level of construction output in October remained 2.8% below the February 2020, pre-coronavirus level.
Mark Robinson, group chief executive at procurement body SCAPE said:“October witnessed the peak of the fuel crisis, port delays and a shortage of HGV drivers.
“The impact these have had on existing supply challenges, combined with ongoing labour shortages, mean that it’s no surprise that output has taken a knock.
“A potential new wave of Omicron cases and the introduction of restrictions to curb it – on top of ongoing concerns around inflation – mean that 2022 is also likely to be characterised by challenges.
“Allowed to go unchecked, these developments will only exacerbate existing labour and supply shortages, which will significantly dampen the sector’s ability to pursue further growth and continue supporting the UK’s economic recovery.”