The second quarter (Q2) of 2024 was the fifth successive quarter of pay rises for UK construction site workers.
The Building Cost Information Service (BCIS) works with Hays Recruitment to track movement in the cost of site labour in the construction industry.
The greatest growth in earnings in Q2 2024 was seen in skilled mechanical & electrical trade placements, with pay rising by 5.6% between the first and second quarters of 2024. Year-on-year, skilled M&E trades saw their wages rise by 14.8%, according to this study.
Skilled building trades saw their pay rise by 1.9% over the previous quarter and by 5.1% over the year. Unskilled and semi-skilled workers saw wages rise by 3.6% quarter-on-quarter and by 8.2% year-on-year.
Plant operatives, however, have seen no improvements to their wages over the past 12 months
Hays also reported fewer construction job placements in Q2 2024, continuing a decrease that has been seen since Q2 2021.
BCIS solutions architect (the computer guy) Paul Burrows, who compiles the indices for BCIS and Hays, said: “As the numbers of placements continue to fall across the board, whilst pay rises in line with wage agreements, it looks as though the market is suffering from a shortage of skilled workers. This is likely to be exacerbated as workers leave the industry, especially with the retirement of older workers who aren’t being replaced.
“Construction output fell again in Q2 2024, which has been a mitigating factor against the effects of a shrinking workforce. New orders data though, which is a snapshot of potential future work, showed another significant increase in the second quarter, up by 16.5% on Q1 2024, boosted mainly by private commercial and infrastructure new work.
“If those orders translate into output, that may mark the point where skill shortages really start to constrain new activity, and I would expect to see upwards pressure on wages. It will be interesting to see if numbers of placements start to rise towards the year-end and, if they do, whether increased demand pushes up wages.”
Hays/BCIS Site Wage Cost Indices are produced using market data from Hays Recruitment, generally representing labour requirements for immediate fulfilment.
Because of this, the indexes tend to be more volatile and faster to react to changes in market conditions than other labour indices. The BCIS Labour Cost Index, for example, incorporates the movement in nationally agreed wage awards, which are generally updated annually, across the industry.
Promulgated rates that took effect in June 2024 included a 4% increase for builders under the BATJIC scheme and 4.5% increases for builders and civils workers under the CIJC. Plumbers in Scotland and heating & ventilating workers are also due for increases later in the year.
