Construction employee pay up 5.5% in a year

Construction worker pay rose by more than 5 per cent last year, according to new official data.

The Office for National Statistics revealed yesterday (21 January) the median earnings in the sector were £2,633 per month in December 2024.

This was up 5.5 per cent from a year earlier, in line with a cross-industry national average pay rise of 5.6 per cent in that time.

The average payrolled construction worker now earns £31,596 per year, according to the data, comfortably above the pan-sector median of £29,484.

Employees in the building sector typically earn more than those in health or education but less than staff at transportation or manufacturing companies. Further analysis on industry pay can be accessed through the CN Intelligence portal.

Rob Driscoll, director of legal and business at trade body the Electrical Contractors’ Association, said pay hikes had put further pressure on the cost of construction.

“The industry will have to factor in wider economic industry wage inflation alongside increased wage costs caused by both the chancellor’s 2024 Budgetary changes, which will take place in April 2025, and arising from longer-term sector-specific union agreements,” he said.

“The supply chain has indicated it has been factoring these rises into tendering to ensure resilience. The fear in the medium term is that supply-side inflation will reduce demand and subsequently growth.”

Two major CN100 firms last year warned that imminent changes to employers’ National Insurance (NI) contributions would hit the sector hard.

Chancellor Rachel Reeves in October announced a 1.2 percentage point increase in firms’ payments through the levy from April 2025.

The threshold at which employers start paying NI on each employee’s salary will also drop from £9,100 to £5,000 at that time. Minimum wage levels will also rise across all age groups in the same month.

Glencar chief executive Eddie McGillycuddy said the NI measures would “sting a bit” and the changes were “ill-thought-out”.

And Nicola Hodkinson, Seddon’s director of business services, called the chancellor’s announcement “a slap in the face for all those contractors who employ labour directly”.