The latest data reveals sustained growth in UK construction site wages, rising for the fifth consecutive quarter.
- In Q2 2024, average site wages increased by 2.4% quarter-on-quarter and 4.6% year-on-year.
- Skilled mechanical and electrical trades experienced the most significant wage growth, with a quarterly rise of 5.6%.
- Despite wage increases, contracting job placements have been declining consistently since 2021.
- A surge in new orders offers potential for wage pressure amidst skill shortages.
In the second quarter of 2024, the UK construction sector witnessed another rise in site wages, marking the fifth consecutive quarter of such increases. Average wages were up by 2.4% from the previous quarter and experienced a year-on-year growth of 4.6%, according to data from the Hays/BCIS Site Wage Cost Indices.
The most pronounced wage growth was observed in skilled mechanical and electrical trades. These trades saw a quarterly wage increase of 5.6%, and an impressive 14.8% rise compared to the same period last year. Meanwhile, skilled building trades reported a 1.9% quarterly increase and a 5.1% rise year-on-year.
Unskilled and semi-skilled workers also saw improvements, with wages rising by 3.6% quarter-on-quarter and 8.2% year-on-year. Conversely, plant operatives’ wages remained stagnant over the past year, highlighting a disparity in wage growth within the sector.
Despite these wage increases, the number of construction job placements continued to decline in Q2 2024, a trend that has persisted since Q2 2021. The industry faces a shortage of skilled workers, exacerbated by the retirement of older employees, as noted by Paul Burrows from BCIS.
The construction output fell again during the same period, acting as a mitigating factor against the shrinking workforce. However, there was a significant rise in new orders, driven mainly by private commercial and infrastructure projects. These new orders increased by 16.5% from Q1 2024, and if translated into actual output, they may intensify wage pressure due to skill shortages.
The continued wage growth in the UK construction industry highlights both opportunities and underlying challenges, particularly in addressing skill shortages.
