Recession halves numbers of construction contractors earning higher salaries, figures show

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The number of contractors within the construction sector earning over £50,000 has halved since the onset of the credit crunch, figures show.

In 2007-2008, 26,000 construction contractors earned over £50,000, according to accounting services provider NoPalavar Group. In 2010-2011, this figure stood at 12,000.

The fall represents a decline in pay levels rather than a fall in the overall number of contractors working in the construction sector, the company says.

The total number of construction contractors remained broadly consistent during the recession, falling by just 0.7% between 2007 and 2011, compared to a fall of 53.8% in the number of high earning contractors over the same period.

“These figures show that the recovery we are starting to see in the construction market could not have come at a more important time,” says Graham Jenner, director at NoPalaver.

“Pay for construction contractors took a battering in the recession. As the wider economic recovery takes hold, hopefully we will start to see a rapid recovery in construction contractors’ pay.”

Jenner said the house building stimulus provided by the Help to Buy scheme has definitely helped, but widespread house building is being hampered by poor access to finance for the smaller house builders.

The company also found that – as major projects such as Crossrail have picked up pace – weekly pay for workers involved in the construction of railways and underground railways jumped by 68% in 2013, to a median level of £823.

Jenner added: “Big infrastructure projects can inject high levels of demand into the construction jobs market and with the government committed to getting HS2 underway as soon as possible, we could see a very sharp rise in demand for contractors at all pay levels.”

“If we see the broad based recovery in the construction sector that everyone is hoping for, pay will start to rise as the pool of available contractors tightens.”