IN Brief:
- UK construction employment averaged 2.084 million in 2025, around 11% lower than 2019.
- Construction regular pay growth fell below the whole economy from May 2025 and ended the year at 2.3% versus 4.2%.
- A smaller workforce paired with softer pay momentum increases the risk of sharper cost pressure if demand rebounds.
The UK construction workforce is smaller than it was before the pandemic, and the pay numbers are starting to show the strain between capacity, demand, and cost.
ONS labour market time series data show construction employment averaging around 2.084 million people in 2025, down from about 2.354 million in 2019. That is a fall of roughly 270,000 workers in six years, with the post-2022 recovery failing to rebuild headcount to pre-pandemic levels. A sector that has historically relied on fast, flexible labour supply is now trying to run project pipelines with less slack.
At the same time, wage growth in construction cooled sharply across 2025. ONS average weekly earnings series for regular pay show construction’s year-on-year, three-month average growth rate easing from 6.2% in January 2025 to 2.3% by December 2025. Over the same December period, the whole-economy measure stood at 4.2%. Construction moved from running hot to lagging the wider economy, and it did so quickly: the construction growth rate was still 5.8% in April 2025, but it dropped to 4.9% in May, slipping just below the whole-economy 5.0% rate and remaining lower for the rest of the year.
The level of pay is not low — the ONS construction regular pay series put the monthly level at £771 in December 2025, compared with £691 for the whole economy — but the direction of travel is the point. With workload subdued, employers can hold the line on uplifts. When workloads turn, the market typically rediscovers that labour is not an on-demand commodity.
BCIS chief economist Dr David Crosthwaite framed the next pinch point around statutory wage floors and knock-on effects. “However, the continued contraction of the workforce and planned increases to national wage thresholds in April could see wage growth pick up in the coming months, particularly if there is an uptick in demand,” he said. “A rise in basic pay often has a ripple effect where the wages of more skilled or experienced workers increase to maintain parity.”
For clients, the practical risk is familiar: a tighter labour market does not just raise payroll lines, it feeds through to prelims, programme certainty, and ultimately tender prices. For contractors and subcontractors, years of stop-start pipelines and delayed investment decisions have left training capacity exposed, just as policy and compliance burdens keep rising.
One caution sits inside the ONS material itself. The EMP14 dataset is based on the Labour Force Survey and is classed as “official statistics in development”, and ONS also notes that workforce jobs data, mainly sourced from employer surveys, provides a more reliable industrial breakdown. Either way, the direction across the labour and earnings series is consistent: the workforce has contracted, and the next demand uptick will test how real that capacity is.
The next ONS labour market release is scheduled for 19 March 2026, with the next EMP14 dataset update due on 19 May 2026.
