Demand For Ground Points To V-Shaped Recovery

Demand for groundworkers, a leading indicator of housebuilding activity, has passed the pre-lockdown peak, suggesting a V-shaped recovery is on the cards for the UK construction sector.

Analysis of payroll data by Hudson Contract, the industry’s biggest payer of subcontractors, shows the number of groundworks operatives paid in the week commencing June 29 reached 6,467.

This compares to the previous high of 6,261 in the week commencing March 16 and the low of 1,735 in the week commencing April 20.

Groundworkers typically prepare construction sites for the shallow foundations of new homes.
Ian Anfield, managing director, said: “Every trade follows the groundworkers so they are the best indicator of what is happening.

“We are quite surprised at these findings because a number of our large clients have not yet returned to full capacity with their labour needs.

“But many smaller construction firms are very busy as a result of pent-up demand to complete smaller housing developments.

“Our field agents tell us that housebuilding activity is recovering strongly in places like Greater Manchester but more slowly in the East Midlands.

“Interestingly, we paid more operatives with Leicester postcodes after the second lockdown was announced than we did before the measures were reintroduced.” Overall, labour demand dropped to 30 per cent of capacity during April but has now recovered to 74 per cent, according to Hudson.

Meanwhile, earnings for subcontractors continued to recover last month.
Analysis of Hudson payroll data for more than 2,500 construction companies shows average weekly earnings of £848 for freelancers in June, compared to £827 in May and £734 in April.
The best-performing regions for earnings growth were the South West (+12 per cent), London (+7.4 per cent) and the North East (+4.4 per cent).

Hudson delivers the most accurate indication of subcontractor pay trends across the construction industry, publishing the average pay for a spectrum of 17 different trades split across 10 regions in England and Wales.

It is supplying statistics to the Bank of England to keep policymakers updated with real-time insights on demand for skilled labour.