Sub-contractor Pay Trends May 2021

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A shortage of EU workers is driving up labour costs in London, the latest analysis of pay trends in the construction industry suggests.

New payroll data from Hudson Contract shows average earnings in London increased by 4.5 per cent during May to £885 per week.

The £1.6bn-turnover group is the UK’s largest provider of tax status and employment contract services to the sector and supplies more than 2,500 companies across England and Wales.

Ian Anfield, managing director, said: “We are starting to see the impact of people leaving the UK ahead of the EU Settlement Scheme deadline on June 30 and not being replaced by incomers.

“First and foremost, this is affecting London which has the highest concentration of foreign construction workers and the most transient labour market.

“The Brexit effect on labour supply is slower the further away you go from the capital and many EU workers have settled in the North of England.

“In central London, the prime housing market is growing for the first time since the start of the pandemic, a sure sign of the high spirits felt across the entire sector.”

The West Midlands also saw a significant rise in weekly earnings for subcontractors, increasing by 3.5 per cent to £920 during May.

The region tends to have a larger supply of domestic tradespeople who have traditionally commanded higher earnings.

The cost increase mirrors an acute shortage of building materials in the West Midlands as a result of significant housebuilding activity and major infrastructure projects in Birmingham including new stations for high-speed rail and facilities for the Commonwealth Games in 2022.

Mr Anfield added: “There is shedloads of construction work about and growing pressure on the availability of both labour and materials.

“We expect some respite for construction companies with the closure of the government’s Self-Employment Income Support Scheme in September which should encourage claimants back onto sites.”

NATIONAL WEEKLY AVERAGE EARNINGS APRIL 2021: £885

Last month, mechanical and engineering tradespeople had the strongest growth in earnings which rose 5.7 per cent to £1,068 per week.

They were followed by joinery and plumbing contractors, whose earnings increased by 4.5 per cent to £1,011 and £967 respectively.

Hudson delivers the most accurate indication of subcontractor pay trends across the construction industry, publishing the average pay for a spectrum of 17 different trades split across 10 regions in England and Wales.

It supplies statistics to the Bank of England to keep policymakers updated with real-time insights on demand for skilled labour.

To access Hudson Contract’s Construction Pay Trends index, please click here

North East

North West

Yorkshire & Humber

East Midlands

West Midlands

Wales

East of England

London

South East

South West