Site rates annual inflation

Over the year to 4^th quarter 2019, site wage rates rose by 2.2% on average, the same increase as retail prices.

The average increase masks differential movement in different types of operatives. Skilled building operatives, M+E operatives and labourers rose by over 5%, while semi-skilled operatives and plant operatives were unchanged (see table).

The new Hays/BCIS site wage cost indices measure movement in the median hourly labour cost to the employer in each of the categories.

BCIS has produced a back series for the index, which shows that over the past eight years site rates have moved significantly faster than the Office for National Statistics’ (ONS) measure of average weekly earnings and the measures of general inflation.

Rates for operatives on building sites generally has risen by 52% over the period.

This compares with an increase of 26% in retail prices and ONS average weekly earnings.

The largest rise was for plant operatives (68%) while rates for unskilled operatives rose by 42%.

Index values are calculated quarterly based on data provided by Hays covering the whole of the UK. This represents a measure of trends in the cost of construction site labour for the whole country.

The base data consists of hourly rates for job placements on a variety of payment arrangements. Rates are adjusted to a comparable basis by BCIS before the index values are calculated so that they represent a consistent measure of cost to the employer.

Adjustments are performed to align the basis of payment (PAYE, umbrella companies and self-employed) and the median wage rate is then calculated for each category and converted into an index.

The new index series is available now on BCIS CapX.