Labour

In the third quarter of 2024, the percentage of contractors facing issues with labour supply increased to 33% — up from 20% in the second quarter. Despite this rise, the current figure is still significantly lower than the 71% reported during the same period last year.

Contractor respondents reporting regional increases in labour rates dropped to 33% for 3Q 2024, compared to 60% in 2Q 2024.

The easing of labour pressures can be attributed to recent lower activity levels. However, improving conditions are boosting sentiment, and the S&P Global UK Construction PMI release highlighted that “higher levels of new business encouraged additional staff recruitment in October. Moreover, the rate of job creation accelerated to a three-month high.”

Non-seasonally adjusted average weekly earnings data from the ONS shows a 3.0% increase between June and September 2024 and a 7.9% increase since the beginning of the year.

According to Hudson Contract's October 2024 pay data, labour rates for self-employed tradespeople rose by 1.9% in October, with year-year earnings increasing by 4.8%. The data revealed regional variations: the South West and Wales experienced double-digit annual growth of 10.7% and 16.0%, respectively, while the East and South East saw declines of 0.1% and 1.4%, respectively, over the year.

Construction vacancies remain at high levels, with ONS data showing that vacancies were 32.1% higher in August–October 2024 than in December–February 2020 (pre-pandemic).

ONS data also shows that the construction workforce was 8% smaller in June 2024 compared to December 2019, shrinking by 4.8% in the year (June 2023–June 2024.)

The Construction Products Association’s Autumn forecasts warned of an impending age demographic crisis for UK construction, with at least 500,000 workers — equivalent to a quarter of the workforce — set to leave the workforce in the next 15 years due to a spike in employment of people between 50 to 64 years old.

With ambitious proposals for housebuilding and infrastructure projects, there are concerns about whether there will be sufficient people and skills for delivery, particularly as the Construction Industry Training Board (CITB) forecasts that the construction sector will need 252,000 extra workers over the period 2024–28 to meet UK construction output.

Skills England’s first report highlighted that the construction industry will “simultaneously need new workers and to upskill existing workers to improve competence, safety and productivity” to meet the government’s plans. It highlighted that modern methods of construction (MMC) has the potential to reduce construction’s reliance on skilled labour pools and drive productivity, giving the example of a 430-home scheme in Birmingham where its use improved efficiency by 50%. However, the report flagged that MMC adoption would need to expand considerably to have a notable impact on skilled workforce requirements.

A network of 32 new Homebuilding Skills Hubs will be established by 2028 to offer 5,000 more fast-track construction apprenticeships per year, providing a realistic working environment for training for trades including bricklayers, roofers, plasterers, scaffolders, electricians and carpenters. The £140 million investment will see the government collaborating with the CITB and the National Housebuilding Council (NHBC). These fast-track apprenticeships will be completable in 12–18 months, compared to the traditional 24–30 months.

However, work is needed to make construction attractive to those making career decisions. Recent research by Deconstruction revealed that 68% of UK adults would not consider a career in construction, associating the sector with words such as “dirty”, “strenuous” and “boring.” The not-for-profit is on a marketing-led mission to fix the industry’s ‘brand image’ problem, helping to showcase it as vibrant, forward-looking and essential to help attract more entrants to the diverse range of roles available.

Changes to the CSCS skills card scheme will reduce the initial labourer’s card validity period from five years to two years. The hope is that the move will encourage new construction entrants to sign up for the CSCS trainee red cards instead and continue their skills development, discouraging using the labourer card as the default easy option for site access. CSCS said its data shows “that 85% of labourers do not renew their card, and feedback from employers highlights many workers leave the industry long before their labourer cards expire.”

There’s concern that higher taxes announced in the Budget, including the 1.2 percentage point rise to employer National Insurance contributions to 15% from April 2025, may impact construction SMEs. The CIOB urged ongoing monitoring of the impacts on sectors such as construction. Feedback from businesses in the Construction Enquirer suggests that rising costs may lead to fewer hours for staff and fewer jobs as firms seek savings. One subcontractor noted they would need to cut costs, stating, “in the current climate, we can’t put up our prices.”