Number of construction contractors earning over 50k tumbles
NoPalaver found that in 2007-8, 26,000 construction contractors earned over £50,000, but by 2010-11, this number had more than halved to 12,000.
The company points out that the construction sector was hit particularly hard by the recession, increasing competition for jobs and leading to lower pay.
According to NoPalaver, the fall represents a decline in pay levels rather than a fall in the overall number of contractors working in the construction sector.
The total number of construction contractors remained broadly consistent during the recession, falling by just 0.7% between 2007 and 2011, compared to a fall of 53.8% in the number of high earning contractors over the same period (see table).
Graham Jenner, director at NoPalaver, says, “These figures show that the recovery we are starting to see in the construction market could not have come at a more important time.
“Pay for construction contractors took a battering in the recession. As the wider economic recovery takes hold, hopefully we will start to see a rapid recovery in construction contractors’ pay.
“The house building stimulus provided by the Help to Buy scheme has definitely helped, but widespread house building is being hampered by poor access to finance for the smaller housebuilders.”
One London property developer recently secured the world’s largest peer-to-peer loan to fund a development in Croydon, because of the challenging lending environment from the banks.
HS2 and Crossrail spark jump in rates for railway construction contractors
NoPalaver says that weekly pay for workers involved in the construction of railways and underground railways jumped over two thirds (68%) in 2013 to a median level of £823, as major projects such as Crossrail picked up pace.
Graham Jenner commented, "Big infrastructure projects can inject high levels of demand into the construction jobs market and with the Government committed to getting HS2 underway as soon as possible, we could see a very sharp rise in demand for contractors at all pay levels.”
Signs that a recovery in commercial property building may be on its way
Concerns over an uneven recovery in the construction sector focused mainly on house building eased recently, with a leading report finding that commercial property building activity rose at its fastest rates since August 2007.*
Graham Jenner added, “If we see the broad based recovery in the construction sector that everyone is hoping for, pay will start to rise as the pool of available contractors tightens.”
“Construction contractors will be hopeful about their prospects in 2014 if we do see the powerful combination of increased house building, high demand from infrastructure projects and a recovery in commercial property construction.”
Number of construction contractors earning over £50k
Construction contractors earning over £50k
No data available
Total number of construction contractors
No data available
* Purchasing Managers Index published by Markit and the Chartered Institute for Purchasing & Supply