Construction wage inflation tops 6%, workforce increases

Weekly pay packets in the construction sector rose 6.3 per cent over the past three months with average wages topping £700, data from the Office of National Statistics (ONS) shows. 

Pay stood at £707 on average in June, down slightly from £717 in May, but the figure was above £700 for a fourth consecutive month.

The ONS figures, published today, show that equivalent average weekly wages in construction stood at £669 in June last year.

Construction wages rose in line with those in the financial sector for the three-month average, reflecting the strength of demand for new employees. Construction also saw the second highest wage increase, behind only the wholesaling, retail and hotels sector.

Employment figures rose by almost 100,000 year-on-year, with the ONS statistics showing construction has the highest workforce since June 2020, when it began shedding jobs due to the COVID-19 pandemic.

The construction sector added 40,000 jobs in the three months to the end of March, the latest month for which this employment data is available from the ONS.

The total construction workforce grew to 2,259,000, up from 2,219,000 in December last year. Despite the rise in employment, job vacancies only fell slightly, from 44,000 to 42,000 between May and July, provisional figures suggest.

ONS stats showed that average hours worked also rose, from 35.7 hours in the three months between March and May to 36.2 hours between April and June.

Nationally, the number of payrolled employees grew by 73,000 to 29.7 million in the figures to the end of June 2022. Overall, employment dipped slightly by 0.1 per cent in the latest quarter.

Unemployment rose by an equal amount (0.1 per cent) to stand at 3.8 per cent of the workforce, close to historic lows. However, unemployment is expected to rise in coming months following warnings from the Bank of England that the UK is heading into a recession.

Commenting on the latest employment figures Dominick Sandford, managing director at IronmongeryDirect and ElectricalDirect, said: “The current level of employment is the highest it’s been since the pandemic began, which is great news for the industry. However, it is still 96,000 lower than January-March 2020, so recovery is certainly still ongoing.

“The coming months are going to be difficult for the whole country, with the cost of living crisis biting hard. The pay increases seen recently will certainly be welcome for those working in UK construction, but it is important they continue into the winter to help offset rising costs and inflation.”

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