The growth in construction salaries should bring a smile to the face of Gordon Brown. The 2005 Hays Montrose/Building contractor's salary guide shows relatively modest average wage inflation of 3.9%.

This has been more or less the rate of salary growth across the industry for a few years now but, in recent months, the trend has become more volatile. In some months, growth has been as high as 4.7% and a sinister light has been cast on these spikes by the steady rise in oil prices and the continuing tightness of the labour market. Anxiety reached its zenith in February - the month when that 4.7% figure was reached. The Bank of England's Monetary Policy Committee had set a limit of 4.5%. The fact that the figure was 4.3% excluding bonuses brought no respite, particularly as it coincided with a rise in unemployment of 29,000 to 1.4 million.

Although construction nationally meets Brown's targets, earnings growth varies greatly from region to region. Below is a breakdown of what's going on across the UK. To give an idea of what these salaries mean, Building has included a guide to what homes particular professions would be able to afford in each region.

London

The capital has seen the largest hike in salary inflation - a whopping 18.9%. It's well documented that many professionals are leaving construction for sectors where they think the work-life balance will be better, and this is creating a counter-offer culture. Firms that are desperate for staff might headhunt a quantity surveyor for £5000 more than their current average of £30,000. Their current employer then counter-offers with another £2000 …

Home counties

The north and south Home Counties contrast dramatically.

In the north, salaries have continued to rise to compete with London. Increases of nearly 6% are typical across the area. In the southern Home Counties, pay has nudged up 0.6%. The biggest factor is probably the slowdown in the housing market.

South-west

Wages in the South-west have fallen 0.8%, despite the vast number of projects in Devon and Cornwall. The dominant factor seems to be the number of people who have moved to the area from the South-east. However, wages in the retail sector remain buoyant, with Bovis Lend Lease's £180m shopping centre in Plymouth and Sir Robert McAlpine's £200m Princessway scheme in Exeter having a significant impact.

Wales

Welsh salaries have been boosted by a surge of work in the traditional strongholds of Cardiff and Swansea. To the west of Swansea there are major oil pipeline projects, with Taylor Woodrow's special projects division doing £80m of civils work on one scheme. In the city centre, lots of big names, such as Willmott Dixon and Balfour Beatty, have picked up significant contracts.

Midlands

The wide range of regeneration schemes in the Midlands has fuelled modest salary hikes of 1.8% in the west of the region and 2.7% in the east. Particularly in demand are project and site managers to keep these schemes on time and on budget.

East Anglia

East Anglia lagged behind other areas for many years owing to its isolation from the London market. However, in recent years there has been a sharp rise in large projects, which have pushed salaries above the national average in many professions. All four positions in engineering - senior engineer, engineer, junior engineer and chainboy - pay more than the UK average.

Scotland and the North-east

The Scottish and North-eastern markets have been buoyant, with earnings growth of 5% and 5.6% respectively. However, the regions still pay below the national average for most professions. A raft of PFI schools and the region's skills shortages have been largely responsible for thickening wallets.

Yorkshire and the North-west

The North-west has found salaries levelling off, and even going through a slight decline of 0.6%. Yet the market is busy, particularly with the flow of regeneration schemes in Manchester and development ahead of Liverpool's year as European Capital of Culture in 2008. Demand for skilled professionals is therefore still high, and local observers suggest that the fall is merely a temporary levelling out.

Northern Ireland

Northern Ireland registers a 2.8% increase in salaries, but this is historically high. Mark Wade, Hays Montrose's manager of construction in the region, says firms now understand that they have to "break through traditional salary bandings" to keep staff in the industry. The commercial sector has also been tight, but the biggest factor pushing up wages has perhaps been the £300m Victoria Square incorporating retail and housing elements.