Percentage pay increases for construction workers in the year ahead could reach double figures, according to the Incomes Data Services.
The independent information and research service on employment issues says shortfalls of key staff in construction could prompt employers to negotiate pay rises as high as 10% in the autumn and winter bargaining period.

In the second stage of a three-year deal agreed by the Construction Industry Joint Council covering 600,000 workers, pay increases have been agreed at 8.9% from June 2002.

However, the IDS points out that employers may offer more than this for workers outside the deal to ease their recruitment difficulties.

Another factor that will make pay rises increasingly diverse will be the introduction of performance-related pay schemes.

In addition, the upturn in trade union recognition means that unions have their "sights set on breakthroughs", according to the IDS.

Barry Stephens, deputy chief executive of the National Federation of Builders, said: "It may be that the IDS believes employers will deal with this [staff shortages] by hiking up their rates as part of a performance package."

But a spokesperson for the Construction Confederation said: "I would consider it doubtful demand will outstrip supply to such an extent that it would result in a double-figure pay rise."