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Pressure mounting for pay rises, says Balfour boss

The quickening economic recovery is putting upward pressure on pay rates, Balfour Beatty Construction Services CEO Nick Pollard has told NCE.

His comments come after the latest construction buyers survey carried out by Markit/CIPS showed the rate of job creation in the industry running at a 17-year high. Output growth was at a four-month high after dropping to a seven-month low of 60 in May.

“There is without a doubt a skills shortage, particularly in certain geographic areas like London,” said Pollard. “Good planners and QSs are in short supply.”

Asked if there was pressure to pay more, he answered, “Sure – but if you want good people you have to pay fairly and look after them.

“Across the industry, we need to do more to boost skills and recruitment at all levels, particularly apprentices and graduates.”

The strong economy is “sweet and sour” news for major contractors – the ‘Tier 1s’ – according to KPMG’s head of infrastructure and construction, Richard Threlfall.

“Surge in output, especially in residential and commercial, is putting much needed volume into the industry,” he said, “but Tier 1 margins remain under sustained pressure from rising input prices and subcontractor costs, and cash positions in many Tier 1’s remain acute.

“KPMG continues to predict at least another 12–18 months before the pressures in the industry even out and Tier 1 management can start to breath easily again.”

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