Given the current inflation in our country, pay rates continue to fall in real terms despite the strong demand for skilled tradespeople.
Hudson Contract, payroll service provider, report that labour rates on building sites in England and Wales increased by 3.2%to £863. per week during January 2022.
Consumer prices however, measured by the Consumer Price Index (CPI), were 5.4% higher in December 2021 than a year before. The Bank of England predicts CPI inflation to peak at 7.25% in April 2022.
Average earnings however, fell by 10% between December and January although that it is expected with the seasonally slow start to a new year, according to Hudson Contract data.
“The 3.2% year-on-year rise is compatible with high demand and high rates for self-employed tradespeople. Our clients confirm they are still busy but feel that it is not as difficult to find skilled labour and that the 2021 rush of tender documents arriving appears to have settled into a steady stream this year”, said Ian Anfield, managing director.
He went on to say that before Christmas it appeared house-builders had their feet flat to the floor, the pressure appears to have eased off as housebuilders are concerned about the impact of inflation and also the ability of potential buyers to borrow the money to purchase the houses that are being built.
This view is comparable with the latest Bank of England monetary policy report, which showed that output growth had weakened due to shortages in materials and labour while increased costs had weighed on demand in a few cases.
The annual inflation in UK construction materials reached 21.5% in December according to the Bank of England monetary policy report.