New data shows strong wage growth against a backdrop of persistent skills shortages
Construction site wages increased by an average of 4.7% in the second quarter of 2023 compared with the same period in 2022, according to the latest data from the Hays/BCIS Site Wage Cost Indices.
The indices are produced by the Building Cost Information Service (BCIS) using market data from Hays Recruitment, reflecting movement in the market for agency labour on a quarterly basis.
Against the first quarter of the year, average site wages were up 4.2%.
Reflective of ongoing reports of labour shortages in many parts of the industry, job placement numbers, as recorded by Hays Recruitment, fell again after a high in the third quarter of 2022.
Paul Burrows, solutions architect at BCIS, who compiles the indices for BCIS and Hays, said: “The sharpest fall was among skilled craftsmen, suggesting that availability of workers, rather than availability of work, is an issue. While we expect a slight rise in 3Q 2023, the trend is downwards.
“Reported skills shortages persist in the industry and wage growth is strong against a background of falling new orders.”
Unskilled labour and plant operator wages in the second quarter of 2023 showed the strongest growth on site, with 8% and 8.1% increases respectively compared with the same quarter last year.
The increases in these categories, which typically include the lowest rates of pay, also reflect the April increase in the National Living Wage.
The latest site wages data from BCIS and Hays can also be set against the backdrop of data recently released by ONS, which showed the number of people employed by construction firms in the second quarter of 2023 decreased by 0.7% compared with the first quarter of the year. However, the number of people self-employed in the construction sector increased by 5.1% in the same quarter.
The ONS data shows the overall construction workforce reduced by 53,000 between the second quarter of 2022 and the second quarter of 2023.
Compared with the second quarter of 2019, there are now almost 209,000 fewer workers. The majority of those who left the industry were self-employed.
The Construction Industry Training Board (CITB) stated in its annual report published at the beginning of the year that 224,900 extra workers (44,980 a year) will be needed to meet UK construction demand between now and 2027.