Home Manchester Construction earnings edge down as Brexit weighs on investment

Construction earnings edge down as Brexit weighs on investment

Ian Anfield, managing director of Hudson Contract

Weekly earnings for freelance tradespeople in the construction sector edged downwards last month, according to latest figures released by Yorkshire-based Hudson Contract.

nalysis of April payroll data for more than 2,200 construction companies in England and Wales reveals a 1.6 per cent fall to an average of £885.

In the regions, Wales saw the biggest decrease between March and April, slipping 4.1 per cent to £789, followed by the East of England, down 3.8 per cent to £928, and Yorkshire and the Humber, down 2.7 per cent to £819.

The marginal decline in weekly earnings is in line with the subdued construction activity reported by purchasing managers in recent months, which has been attributed to Brexit-related delays in decision making by businesses. The figures are also likely to reflect the impact of freelance tradespeople taking time off for Easter holidays.

Freelance civil engineers saw weekly earnings fall by 2.8 per cent during April, mirroring the decline in civil engineering activity reported in the monthly PMI published on May 2.
The North West was the only region to see growth in weekly earnings, rising 4.5 per cent to £837 month on month. All regions experienced solid year-on-year growth, led by the North West (18.1 per cent), London (10 per cent) and the South East (9.9 per cent), reflecting the strong demand for skilled trades.

Specialist tradespeople had the best month for weekly earnings, enjoying an 11.7 per cent rise in April to an average of £1,056. Shop fitters, meanwhile, saw their weekly earnings fall 9.4 per cent to an average of £1,111 during the month.

Hudson Contract delivers the most accurate indication of sub-contractor pay trends across the construction industry, using payroll data for more than 2,200 construction companies to publish the average pay for a spectrum of 17 different trades split across ten regions in England and Wales.

Ian Anfield, managing director at Hudson Contract, said: “Our analysis shows that weekly earnings for freelance tradespeople fell by 1.6 per cent to £885 in April.

“While the figures will reflect some seasonal influence, there is little doubt that Brexit uncertainty is causing some businesses to hold back on new investment. The weak pound, a sign of this uncertainty, is increasing the cost of importing steel, concrete, plaster and plastic building products, which is leading to input inflation.

“We are also seeing smaller firms pricing up work for the larger contractors to reflect the risk of dealing with the financially troubled outsourcing sector.

“Whatever happens with Brexit and the wider economy, the construction industry will continue to rely on self-employed tradespeople and their ability to supply specialist labour.
“Their overall rise in earnings over the last year highlights the general shortage of skills in the sector and good financial incentives for young people to learn the trades.”

Hudson Contract, founded in 1996, is the UK’s largest professional workplace audit and Construction Industry Scheme (CIS) contract provider.

The family-owned group provides audit contract and payroll services to more than 2,200 construction SMEs, on whose behalf it processed 1.7m payments last year.

Hudson Contract established the market for secure self-employment in construction, and eliminates CIS financial risk for its clients.

The group’s monthly figures offer a valuable insight into pay trends in the £90bn construction industry, which accounts for 6.7 per cent of the UK economy and supports 2.9m jobs.