4.0% Wage Increase
Over the quarter the Pound has weakened across currency markets - the biggest impact to construction being a 15% drop against the Euro. As circa 60% of construction components are imported from the Eurozone, we see this compounding forward pricing.
Early January saw oil trading at US$ 30 a barrel due to the global slowdown of demand and continued effective over supply. Scotland’s economy is particularly hard hit by this considering that oil averaged US$ 110 a barrel in 2011 to 2014.
The majority of materials cost indices have recorded modest growth in the quarter averaging 1.2% per annum, led by electrical and mechanical components, ahead of CPI headline rates of inflation.
Total pay in construction remains ahead of average national earnings. National wage agreements continue to reflect above inflationary rises on basic pay and subsistence.
Over half a million more people were in work at the end of 2015 compared to 2014. The unemployment rate at 5.1% is the same as it was in 2005, following continual reductions in 2015. This is not an even recovery; the North East has 1.6% higher unemployment than before the recession, whilst London has 1% lower.
More than 230,000 construction workers will be required by 2020 to meet the skills gap according to the CITB. With supply constrained by workers leaving the industry, new entrants and training, particularly through apprenticeships, are seen as vital to keep the lifeblood of the industry flowing.