Building firms ask tradespeople to cut rates by up to 30%

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Demand for labour on construction sites across the UK decreased by 70% in April, as building firms ask tradespeople to cut their rates by 10-30%, according to Hudson Contract

Hudson Contract, which provides payroll services to more than 2,200 construction SMEs, said more sites are reopening with social distancing measures but building firms are asking tradespeople to cut their rates by 10-30% to share the costs of reduced output.

Ian Anfield, managing director, said: “The number of people we paid dropped by up to 70% in the space of three weeks last month.

“The number is steadily rising again as more sites reopen with many clients telling us they are going back to work on Monday, May 11.

“Construction output will be lower and costs will be higher as firms figure out ways for people to work safely on site. This is why they are asking tradespeople to cut their rates.”

Funding concerns

Anfield said housebuilders are the slowest to resume work with concerns over the availability of funding in the housing market to complete purchases.

He added that several clients are reporting strong demand to price new projects as a result of pent-up demand.

Hudson Contract’s latest figures show earnings for subcontractors fell by an average of 18.2% in April, likely due to site shutdown.

Analysis of payroll data for more than 2,200 construction companies shows a weekly average of £734 for freelancers in April, down from £897 in March, and the lowest level since January 2015.

The worst hit areas were Yorkshire and the Humber (-32.1%), the South West (-26.9%) and Wales (-25.2%).

Region April 2020

Average

Month on Month

% Change

Year on Year

% Change

North East £578 -18.9% -24.3%
North West £704 -17.9% -15.9%
Yorkshire and the Humber £644 -32.1% -21.4%
East Midlands £808 -12.6% -10.4%
West Midlands £744 -10.0% -20.3%
Wales £705 -25.2% -10.6%
East of England £812 -15.9% -12.5%
London £809 -9.1% -10.0%
South East £773 -17.1% -12.8%
South West £656 -26.9% -16.6%

 

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