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Freelance Builder Pay Trends: May 2012

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 100,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

April is traditionally a month that heralds a ‘Construction Spring’:  the green shoots start to show as new budgets are agreed and the spend for the year ahead is agreed.

But this year is different.  Earnings across all five Hudson Contract regions are down, possibly due to the fact that the UK had almost double the amount of average rainfall during April – causing the weather to postpone spring for another four weeks, at least.

This month’s figures also highlight a disparity in certain trades from one region to another.  For example:

• Those involved in demolition in the North East average £298 a week, while their counterparts in the North West are on almost double at £591

• Electricians in the South West are poor neighbours compared to those in North West with average earnings of £572 and £833 respectively

• Looking across all regions, eight out of the 17 trades we monitor have a disparity of over £200

Bridging the earnings gap An interesting trend emerges when we look back over the past three Aprils.

Hudson Contract Managing Director David Jackson comments:  “As you would expect, the consistent factor is that average earnings are always highest in South East England.  But take a look at the table, and see how the gap has narrowed.

“Over the course of twenty-four months, the earnings differential between the South East and the North has plummeted by nearly 70%. I wonder if it is a case of freelance builders from the north moving south to get work and taking their average pay rates with them, or if the squeeze on costs is gradually being more evident in the South East?  Whatever the reason, it’s an interesting trend, and one we will continue to monitor.”

click here to see this month’s paystats

Freelance Builder Pay Trends: April 2012

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 100,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

For the first time in three months, average earnings are up across every region. Not by much – just half a percent across the country – but at least it’s a step in the right direction.

Hudson Contract’s latest figures reveal:

• Mixed fortunes amongst the various trade groups – with room for cautious optimism. 54% of trades across the country earned more this month, and of these, almost 40% are now earning about ten per cent more than they were three months ago.
• Joiners are in demand, with pay rates consistently up across the country, ranging from a 0.41% increase in the South-East to an extra 22% in the South-West. Although having said that, joiners were, in fact, the worst paid trade group in the South-West, earning £458 as against a weekly average of £634.
• Freelance builders in the South-East are better paid than their regional counterparts, with average weekly earnings of £670.
• Shopfitters in the South-West are the only regional trade group with four-figure earnings: £1,128 a week.

There is also good news from the latest Markit/CIPS Construction Purchasing Managers’ Index, published at the end of March. The numbers echo the positive trend, reporting:
1. New orders are rising fastest than at any time since September 2007.
2. Growth in the industry has been maintained for a six month period.

The Office for National Statistics has also just published its state-of-the-construction-industry figures. These paint a slightly different picture, reporting that output has fallen in both the new work and repair and maintenance sectors for the six months to January 2012, and that year-on-year, output is also down by 2.3%.

So which figures should you believe? Hudson Contract Managing Director David Jackson confesses: “I think the key message that comes out of these industry reports is that frankly, we don’t know. There is continuing uncertainty across construction, especially when you consider that even when new orders have been won, there is often a substantial lead time before the work is actually started.

“Then again, we have just had the best March weather for many years, and as we all know, that means greater opportunities to work. So yes, it’s encouraging to see earnings rising, but it’s too soon to hope for a trend – it’s very much watch this space.”

click here to see this month’s paystats

Freelance Builder Pay Trends: March 2012

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 100,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

Love obviously wasn’t in the air in February – at least, not as far as our monthly pay stats are concerned.

Four out of the five regions are again showing a decrease. Only the South-West has managed to buck the trend, and then only by 0.33%, which translates as an extra £8 or so over the month.

Looking at the 17 different trades across our five regions, it’s more of a mixed bag, with 40% earning more, and 60 per cent feeling the pinch.

Looking at the biggest winners and losers, it shows how much regional variation comes into play with two trades appearing in both sections.

Winners:

• Electricians in the North-East: Up 18%

• Equipment & Operator Hire in the South-West: Up 17%

• Steel & Timber Frame Erectors in the South-West: Up 17%

Losers:

 • M&E operatives in Midlands, North-East and South-West: Down 18%+

• Steel & Timber Frame Erectors in the Midlands and South-East: Down 17%+

• Equipment & Operator Hire in the North-East: Down 19%

Hudson Contract Managing Director David Jackson comments: “The Office for National Statistics is, as expected, reporting a decrease in construction output, so our own pay stats confirm the trend. I’m hoping the budget will bring more positive news – the Chancellor needs to produce something that will kick start construction again.

“The newly-announced Mortgage Indemnity Scheme seems to be a step in the right direction, as it will help builders and first-time buyers alike. Let’s hope there is more to follow.”

click here to see this month’s paystats

Freelance Builder Pay Trends: February 2012

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 100,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

It was business as usual in January.  Which is to say that – as usual for this time of year – there was less work than in previous months, resulting in labour-only subbies across all five Hudson Contract regions earning less.

Comments Hudson Contract Managing Director David Jackson:  “This is exactly as we were expecting based on pay stats for previous years.  Christmas and the New Year always impacts on projects and everything slows down for a couple of weeks.”

The Midlands was the worst-affected region in January, with earnings down by 8.44%.  Freelance builders in the North-West fared relatively better, with a fall of 1.76 per cent compared with twelve weeks ago,

Other general observations:

• Plasterers had a better month than other trades, with earnings up everywhere except in the South-West – and jumping by 8.52% in the South-East
• The South-East also leads the way with the highest regional weekly earnings during January, although the figure of £636.39 is 5.31% less than it was back in November
• Average earnings are currently lowest in the North-East at £572.30 – freelance builders everywhere else are taking home at least £600

David Jackson adds: “Looking ahead, by the end of January, the number of operatives being paid by Hudson Contract was back up to 93% of the peak seen before the festive break. So things have picked up during the month and hopefully this will filter through in February’s pay trends – although the spell of bad weather during the month might also have taken its toll.”

click here to see this month’s paystats

Freelance Builder Pay Trends: January 2012

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 95,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

According to the Construction Products Association, our sector is heading for a further deep recession. Companies carrying out public sector projects face an especially tough time, with output expected to fall by 13 per cent this year, due to spending cuts. Private sector construction, which grew by 4.2% in 2011, is heading for a year of nil-growth.

“The climate is certainly cautious,” comments Hudson Contract Managing Director David Jackson. “Although having said that, last year ended on a positive note, with pay trends on the rise in every part of England.”

Freelance builders in the South-West saw their earnings rise by 4.58% compared with three months earlier. Elsewhere the increases were more modest: 2.63% in the South-East, 1.84% in the Midlands, 0.76% in the North-East and 0.45% in the North West.

What happened to freelance pay rates during 2011?
Overall, taking the five regions and the 17 trades, there has been an across-the-board increase of just over 5%, which works out at £31 per week.

“But before anyone gets too excited about that,” continues David Jackson, “you have to consider that last year’s inflation rate was around 5%. So in effect, the rates have remained the same.”

In fact, the South-West has done best, with average pay up almost 10%. Even though freelance builders in the South-East are the nation’s highest earners, their average pay over the past twelve months remained pretty much static.

Winners and losers in 2011 – trade by trade

Winners:

• Demolition +20%
• Steel & Timber Frame Erectors +18%
• Bricklayers +7%

Losers:

• Plumbers -7%
• General Construction -5%
• Roofers -2%

David Jackson comments: “It’s obviously not good that anyone who’s self-employed is earning less than they were twelve months ago, I have to confess that I’m surprised earnings haven’t been hit even harder, considering we know how costs have been squeezed in all directions.

“I think it goes to show that on average, freelance builders who deliver quality work, on time and to budget can still cover inflationary factors, and ultimately help provide the construction industry the flexible workforce it needs.”

What’s your view?
Do you agree with Hudson Contract’s perspective? We’re keen to hear about your trade sector – for example:

• How’s your order book?
• How far ahead have you got work?
• What are the current issues facing your business?
• Are you spending more time chasing invoices?
• Will things get better or worse for your business during 2012?

Let us know what you think and we will collate your responses and publish the findings. Just email fiona.pollin@hudsoncontract.co.uk

click here to see this month’s paystats

Freelance Builder Pay Trends: December 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 95,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

This time last year, there was deep snow on the ground, but with Christmas just around the corner, the weather has yet to make any real impact on the industry this winter. Which goes to show that November’s figures demonstrate just how much costs are again being squeezed.

In three of our five regions – the North-West, Midlands and South-East – earnings have tumbled by roughly 5% compared to three months ago. “The news is scarcely better elsewhere,” Hudson Contract Managing Director David Jackson observes.  “Earnings are also down in the South-West, which leaves only the North-East bucking the trend, with a fractional rise.”

General Construction has been hardest hit this month, with average earnings down by almost 9% across the country, closely followed by roofing, which has fallen by 8.7%.

Continues David Jackson:  “Despite the numbers, clients seem generally buoyant about the current market situation.  Although having said that, the good mood is the result of having more work than this time last year or the year before, rather than a celebration of full order books.

“Then again, the extra work brings problems of a different nature.  As a builder in London explained to me last week, the upturn means he needs to buy more materials and replace equipment.  But after two lean years, his firm’s credit rating isn’t good.  So the banks won’t lend, and equally, suppliers are not giving the same amount on credit, which makes cashflow a serious issue.

“Looking ahead to next year, the public sector spending cuts are likely to outweigh private enterprise recovery, and 2012 is likely to be tough.  Let’s just hope for a mild winter… at least our clients have the flexibility to add freelance labour to their projects as and when necessary, and respond swiftly to market fluctuations.”

click here to see this month’s paystats

Freelance Builder Pay Trends: November 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 95,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

What a difference a year makes! In November 2010, we reported that during Q3, construction was the biggest contributor to economic growth – but 12 months on, the picture is quite the opposite.

A new survey from The Office for National Statistics reveals that Q3 construction output has fallen by 0.6 per cent. “That might not sound too bad,” observes Hudson Contract Managing Director David Jackson. “But in fact, we are the worst-performing sector over the past three months, and have declined four per cent since this time last year.

“From a pay trends point of view, however, the situation is very different. The national picture is that compared to this time last year, average earnings are up five per cent.”

Big winners in the last twelve months:

• Demolition: Up 25%
• Specialist Trades: Up 21%
• Shopfitting: Up 21%

Regional winners and losers in the past three months:

• Shopfitters in the South-East: Up 20%
• Plasterers in the South West: Up 18%
• Equipment & Operator Hire in the Midlands and South-East: Down 23% and 18% respectively
• Demolition in the North-East: Down 17%

David Jackson observes: “Also noteworthy in this month’s statistics, is that surfacing contractors have seen an increase on three months ago – and are also up over ten per cent on this time last year. Perhaps this indicates a dash to get the roads sorted again, before the winter really starts to hit.”

All in all the latest Hudson Contract pay trends show a mixed picture. Regions that were up last month are now down, and there is very little consistency across trades in different regions.

click here to see this month’s paystats

Freelance Builder Pay Trends: October 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,500 construction companies and over 95,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

Something of a mixed bag this month – although perhaps contrary to expectation, both our northern regions show an increase in average earnings, whilst average pay is declining everywhere else.

“Broadly speaking, average pay is at the same level as three months ago,” comments Hudson Contract Managing Director David Jackson. “Perhaps this mirrors all the talk and speculation that seems to be preparing the country for a double dip recession. Everyone seems nervous about what’s coming next.”

In construction, the recession has now lasted for almost four years, with the latest quarterly survey from the Federation of Master Builders reporting their members’ work has been declining since January 2008.

“I share their view that there has never been a time when our industry has been so badly affected by the prevailing economic climate.” David Jackson continues. “Recent research from Deloitte shows an 11 per cent increase in construction and property firm administrations in the last quarter. So it may well get worse before things pick up again.”

An additional 5,079 freelance builders sign with Hudson Contract this quarter

So far as Hudson Contract is concerned, July, August and September have combined to generate a further quarter of growth, with 82 new clients signing up to join the Hudson Contract family. “This in turn means an additional 5,079 freelance builders have signed Hudson Contracts and started work on our clients’ sites,” says David Jackson.

“With weather forecasters predicting we’re in for another tough winter, flexibility will be key over the coming months. It’s one of the prime reasons why so many contractors partner with Hudson Contract – they know that with us, they can safely engage labour-only subbies as and when needed, instead of carrying the sort of fixed overheads that can be the final straw, and force firms into administration.”

click here to see this month’s paystats

Freelance Builder Pay Trends: September 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 90,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

Average earnings are up for the second month in succession – but the rate is slowing.  Compared to three months ago, the average increase is just over 2%, whereas last month it was 5%.

Subbies in the Midlands are currently doing well, with rates up by 5%.  And it’s boom time for civil engineers; their earnings have rocketed by 21% over the past three months.

By contrast, rates freelance builders in the South-East remain flat over the same period, and it is only because surfacing contractors, roofers and those working in steel and timber erection have seen 13% increases that the region as a whole has not seen a decline.

Hudson Contract Managing Director David Jackson comments:  “While it is great to see the average earnings on the increase, I fear the trend will be short-lived.  Judging from what I am reading in the trade press and comments from our clients, I think the situation will change as we move towards autumn. In fact, I suspect the South-East is leading the way in this respect.”

“Margin, margin, margin.”

Our clients are telling us the key focus right now is margin, margin, margin – with pressures coming from all directions:

• Materials prices are on the increase – and with volatility on the stock markets, this is likely to continue into next year
• Tendering at cost or below cost price is on the increase from larger contractors
• Larger contractors chasing smaller projects than they would have pre-recession.
• New legislation for temporary workers: The Agency Workers Directive begins in October and the Government estimates small firms will have to pay an extra £2,493 p.a. to comply with the new rules.

“SME’s are being tightly squeezed,” David Jackson observes.  “It’s a double-whammy.  Not only are they losing out on contracts that have previously been their bread and butter, but when the winners sub-contract the work, the low tender cost impacts, as well.

“Whilst Hudson Contract can’t do anything about the cost of materials or tender prices, one thing we can guarantee is that our clients won’t be affected by the Agency Workers Directive. They are all exempt.”

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Sub-contractor payment trends: August 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,600 construction companies and over 90,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

Just one look at this month’s pay statistics – and it’s clear that summer is here.  Rates are up across the country, with an average increase of over 5% compared to three months ago.

“The last time we saw a jump like this was twelve months ago,” comments Hudson Contract Managing Director David Jackson.  “It really does go to show that when the weather is good, the light is there, and there is work available, freelance builders have the opportunity to maximise their time and energy into work – and are rewarded accordingly.”

Trades that have seen the biggest jump in quarterly earnings are shopfitting, roofing and insulation, all with an average rise of more than 10%.  And in some parts of the country, the figure is even more dramatic:

• Shopfitters: South-West 20.44%, North-West 23.51%
• Roofers: South-West 13.09%, Midlands 17.88%
• Insulation: Midlands 16.03%, South-East 19.28%

This month’s highest-earning region is the South-East, with average earnings across all trades of £741.26.

And the losers?

“Out of the seventeen trades we monitor, the only one to report a decrease nationally is electrical,” David Jackson reports.  “Looking at the bigger picture, however, this month’s average earnings are almost back to the level of two years ago.  Is a more positive trend emerging?

Let’s hope so!”

click here to see this month’s paystats

Sub-contractor payment trends: July 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for over 1,500 construction companies and over 88,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

One step forward.  One step back.  Or to put it another way – yet again there is no consistency – either across the country or from trade to trade – in our latest set of pay statistics.

Four of our five regions have reversed their trends on last month, with the North-East and North-West now showing an improvement, and the Midlands and South-West going into reverse gear.

The only consistency is for freelance builders in the South-East, and they are worst off as their earnings continue to fall.

Hudson Contract Managing Director David Jackson comments:  “Although the latest Markit/CIPS Construction Purchasing Managers’ Index is still showing growth, this also seems to be slowing down. Moreover, one of the survey’s key points is that confidence in the sector and its future growth is once again declining.”

The backward trend is also mirrored by the latest forecast from the Construction Products Association which predicts a grim future for construction:

• Overall prospects for construction to remain poor for the next three years
• No significant growth until 2014
• Even by 2015, output will not have returned to pre-recession levels

David Jackson continues:  “Our clients currently share a fair amount of uncertainty about where – and when – their next contracts are coming from.  That means they are under ongoing pressure to cut costs and save money to help protect their businesses.

“At least they have to peace of mind knowing they can react to the changes in the market without incurring unnecessary costs during down times – and that the operatives they engage through Hudson Contract are genuinely self-employed.”

Sub-contractor payment trends: June 2011

June 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for 1,500 construction companies and 85,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

• Average pay rates are up over 6% in the North East and Midlands, and 4.5% in the South-East
• But the South-West and North-West are down by almost 6% and 7.5% respectively

And in the past three months:

• Not much change across all five regions: Two are slightly ahead in the pay stakes and three show a small decline. Which is more or less the same as a month ago.

So are we seeing pay rates leveling? “If you’re in the South-West, the short-term figures are more encouraging,” says David Jackson, “but in the North-East, a longer view is recommended.

“Frankly, the picture couldn’t be more mixed. From which I conclude, the good-news-bad-news picture that is being painted by industry journalists is an accurate reflection of mixed fortunes and uncertain times. Some sectors are achieving success while others struggle – and then a month or two down the road, the sector positions are reversed.

“At least clients in the Hudson Contract family are saving money every week, by giving themselves the flexibility to use freelance builders. It means they also have no tax status or employment tribunal risk, so they can devote all their energy to steering their business through these turbulent times.”

Sub-contractor payment trends: May 2011

May 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for 1,400 construction companies and 85,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

• ‘More sub-contractors working at reduced capacity’
• ‘Rise in construction companies going into administration’
• ‘Industry calls for Government action as construction falls 4.7%’

“In short, everything is being squeezed and stretched,” continues David Jackson. “And in particular, time, budgets and margins. While some of our clients are reporting good times, others have to chase what little work is available. I’m also aware that relative prosperity seems to be happening in cycles, with some trades swamped with work while others see very little, until a few months down the line, when positions are reversed.

“More than anything else, though, our clients are preoccupied with cashflow and getting paid on time. I am hearing reports of delays of more than ninety days, and although that is extreme, a survey by the National Specialist Contractors Council reports that 77% of firms are having to wait for between thirty and sixty days for payment, which can cause all manner of problems.”

Sub-contractor payment trends: March 2011

March 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for 1,400 construction companies and 80,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

• Surfacing contractors are doing better in four out of five regions. Last month, those in North-West earned 17% more than they did three months ago. Meanwhile their counterparts in the Midlands continue to endure falling earnings.
• Plasterers across the country on the other hand, are having a hard time of it, expect in the South-West where earnings have edged up by 2.71% increase on three months ago.
• Shopfitters in the Midlands and the South-East are doing well, with weekly earnings of £1,208.67 and £1,054.08 respectively – which may indicate an upturn in the local retail trade.

Overall the only consistent ‘winner’ this month is roofing contractors

“Speaking to a couple of our roofing clients yesterday, I was expecting them to explain the reason for the upturn was a month of reasonable weather which has compensated for December and January’s dreadful conditions that bought work to a complete standstill in many cases,” says David Jackson. “But it turns out this isn’t the case.”

A Midlands- based client reports that the earnings upturn was actually down to two factors:

1. The New Year has seen new contracts start – however some of these have been nearly THREE YEARS in development.
2. The other increase in workload had come from local government, partly as a result of normal winter wear and tear, but also because as the end of the financial year approaches, the local authority wanted to use its budget rather than risk losing the cash altogether in April.

SUB-CONTRACTOR PAY TRENDS

January 2011

Hudson Contract delivers the most accurate indications of pay trends across the construction industry, using payroll data for 1,400 construction companies and 80,000 freelance builders to publish the average pay for the full spectrum of 17 different trades across five regions.

Having shivered  our way through the coldest  December for almost 100 years – with even the average monthly temperature below zero for the first time in history  – it comes as no surprise to report that freelance builder earnings across the whole country have taken a hit.

“It wasn’t just the snow,” Hudson Contract Managing Director David Jackson sums up.  “The permanent frost on the ground meant we experienced the worst building conditions for thirty years.  Feedback from out clients is that work across the whole country came to a complete standstill  – a mixture of too cold to work, not being able to get to the site, and deliveries that failed to arrive.

“In effect, we lost half of December, and that’s before you even take the holidays into account.  At the start of the month, in particular, when was impossible for outdoor projects to continue, the number of operatives we paid was down by 17%.  That’s an exceptional fall.  During one week, one of our clients only managed to get on site for a total of nine hours.” As you would expect, bricklayers and scaffolders have been worst hit by the weather:

• Bricklayer weekly earnings in the South-West tumbled to  £382.02 in the South-West
• Scaffolders in the North-East earned £374.73 – down by 19%

 “One sad certainty of the weather is that it will have proved the final financial straw for some construction companies,” David Jackson continues.  “I read in a national newspaper that a small family building firm in Staffordshire said the December weather was directly responsible for a loss of about £20,000.  Apparently his local authority insists builders should not lay any concrete if the temperature is below -2C.  Since the firm had no indoor work, it had to pay staff to sit around doing nothing – his words – for three weeks. 

“Substantial losses like these will deal a final killer blow to some of the many building firms that have been struggling to make it through the recession.  By contrast, Hudson Contract clients have the flexibility to invite their freelance builders to work extra hours – and earn extra money – when the weather gets better, and are not obliged to pay people for being idle.”

One trade DID profit from the weather…

December was a good time to be a freelance plumber, as the freezing weather bit into badly insulated pipes.  Higher earnings everywhere reflect the increased workload to keep residential and commercial buildings running smoothly, particularly in the North-East, where the average increase was 19%, with weekly earnings of £495.67.

click here to see this month’s paystats