Freelance Builder Pay Trends: January 2015

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 2,200 construction companies to publish the average pay for the full spectrum of 17 different trades across five regions.

First, the good news: Rates are up for freelance builders across the country for the sixth month in succession. “More often than not, there’s a slight downward trend in our December payroll data,” observes Hudson Contract Managing Director Ian Anfield. “But the weather has been reasonably kind, sites were operating right up until Christmas Eve, and the traditional break between Christmas and New Year seems to be disappearing, hence the opportunity for enhanced earnings.”

But the future’s looking less certain: According to the latest industry reports, the UK construction sector expanded at its slowest pace for seventeen months in December, driven by a decline in civil engineering projects and public sector budget constraints. Add to this, supply chain pressures, skills shortages in some areas, and the approach of the General Election, then industry confidence is tempered by a degree of caution.

Still, there’s reason to be cheerful: New data from the Purchasing Managers Index reports a score of 59.4 – significantly down from the peak of 64.2 in September, but it is still well above the long-running average of 54.5. (Anything above 50 represents a growth). According to the Office for National Statistics (ONS), construction output remains 3.7% percent up on 12 months ago.

Pricing and margins will be business-critical in 2015

“It’s looking healthy at the moment, but given the depth of the recession, it is prudent to be somewhat cautious,” Ian Anfield adds. “On the one hand, 52 per cent of buyers anticipate a rise in activity this year, and the need to keep up with its own speed of recovery will bring additional opportunities for sub-contractors. But economic conditions remain tough, and getting the pricing correct is likely to prove business-critical this year, because the wafer-thin margins of yesteryear are becoming increasingly unsustainable.

“Clients I’ve spoken to in the past week or so are also preparing themselves for a slowdown of growth at least until the election is over and the uncertainty of who will be in power has been resolved. But generally speaking, everyone reckons 2015 is going to a better year for their business.”

Back in the short-term, the Midlands leads the way with average regional earnings up by over 6% over the last three months. At the other end of the scale, the North-East can only report an increase of 1.37%. Meanwhile, this month’s winners and losers all come from just two regions: the South-West and the North-West.

This month’s winners:

• Plumbers in the South-West: +21%
• Scaffolders in the South-West: +17%
• Equipment and Operator Hire in the North-West: +17%

And the losers:

• Mechanical & Engineering in the South-West: -11%
• Plasterers in the South-West: -18%
• Specialist Trades in the North-West: -8%