Summer 2022 UK Market Report
Site productivity and labour
Just below 60% of contractors said that present site productivity on their projects is in the 81–100% range as a proportion of pre-pandemic level, nearly the same as our Winter 2021/22 and Spring 2022 reports at 60%.
No contractor respondents report site productivity below 60% of pre-pandemic level in this survey. In the Spring survey, the Russia-Ukraine conflict was causing issues with deliveries and materials availability, impacting site progress.
The latest S&P Global/CIPS UK Construction Purchasing Managers’ Index (PMI) release for July reported that “suppliers’ delivery times lengthened again in June, but the downturn in performance remained less marked than that seen in the first quarter of 2022.” Transport issues and staff shortages were the most common reasons for long wait times.
Issues with labour supply increased in the second quarter, with 88% of contractor respondents reporting issues.
Respondents noted recruitment challenges across most trades, particularly groundworks, bricklayers, joiners, steel fixers and mechanical and electrical installers.
Increases in labour rates were noted by 96% of contractor respondents in the past quarter (2Q 2022), up from 84% for the previous quarter (1Q 2022).
Despite a second bank holiday for the Queen’s Platinum Jubilee, Hudson Contract data shows that weekly earnings in June were up 0.3% on May and 5.5% compared with the previous June. Increases of over 10% in the year are reported in London (19.7%) and Yorkshire and the Humber (10.7%).
After months of talks, construction unions and contractors have agreed to a blanket 5% pay increase for more than 500,000 site workers under the Construction Industry Joint Council (CIJC) pay framework.
The one-year Working Rule Agreement came into effect on 25 July, including a 5% pay increase across all rates and a two-stage increase in non-taxable allowances.
