With the continuing skills shortage leaving firms fighting over the best candidates and the glut of new developments on the go, the BSj/Hays Montrose salary survey reveals a buoyant job market in which salaries have been on the increase – no matter where you’re based

South-west

The South-west is continuing to experience a considerable skills shortage across most sectors. Mid-level engineers are in short supply, with commissioning engineers seeing pay increase by up to 14% and resident engineers experiencing a 15% salary rise. A trend that is emerging in the South-west is for engineers to occupy senior roles within companies, something which is making competition for these positions quite fierce.

Wales

Salaries have increased dramatically in Wales as new commercial, residential, and public sector projects continue to dominate. Cardiff and Swansea are both undergoing massive redevelopment and schemes funded by the European Union have also resulted in substantial investment in civil and infrastructure projects. These new projects have increased Wales’ profile dramatically and as a result, property prices have been increasing – in some areas by as much as 25% in the past year alone. To offset the increased cost of living, employers have begun raising salaries substantially – with many positions in building services gaining an average 10% pay increase.

North-west

The North-west has undergone something of a construction boom over the past few years, partly a result of events such as Manchester’s successful staging of the Commonwealth Games in 2002. As a result, the region has experienced a massive building services skills shortage, with pay increasing by up to 13% compared with 2003. Healthcare, education and residential office schemes make up the bulk of projects requiring staff, meaning candidates with experience in those sectors are highly sought after.

Northern Ireland

Since 2000, Northern Ireland has experienced rapid growth, with many major UK companies quick to establish themselves in the marketplace. This has further stretched an already busy market, causing massive skills shortages. Currently, there is a particular demand for engineers and quantity surveyors on both a permanent and contract basis, and mechanical contract engineers and site supervisors have experienced a 13% pay increase.

London

Although the London construction market is experiencing a severe skills shortage, salaries for building services engineers only rose slightly in 2004 from the previous year and are showing signs of beginning to plateau. There are two reasons for this apparent incongruity. First, with the demand for experience workers far exceeding the supply, clients are becoming reluctant to pay for someone they don’t feel has the skills to warrant a higher salary. Second, the fees that companies charge their clients are not rising at the same rate as inflation and as a consequence firms cannot afford to outbid each other to attract new candidates.

Midlands

Across the Midlands, inner-city and out-of-town housing developments are the growing sector. Residential contracts have created a huge demand for design engineers with both electrical and mechanical backgrounds, as well as for quantity surveyors and estimators – and there is competition between local and national contractors to secure their services. However, an oversupply of operational staff in the region has meant their salaries have remained relatively static.

Yorkshire and the north-east

The cost of living in Yorkshire and the North-east of England continues to rise. As a result, companies have increased salaries by an average of 12% to attract qualified candidates, with site supervisors and CAD operators seeing the most dramatic rise. In Yorkshire there has been a small drop in salaries for junior engineers and graduate trainees as a result of an oversupply of candidates. However, for the most part, the market has been candidate driven, with private investment on the rise and new commercial and retail developments creating dramatic growth.

Scotland

The market in Scotland is becoming increasingly buoyant with inward investment and business confidence continuing to fuel strong construction activity. As a result, pay increases have averaged 7% across most industry sectors. Over the past few years, there has been a dramatic increase in the amount of professional construction and property staff relocating to Scotland – notably Edinburgh and the Highlands – from other parts of the UK, particularly for candidates looking for varied opportunities in the industry and an overall higher standard of living.

What happens next: prospects for 2005

As the tables show, the past year has been good for the building services industry, with the salary increases in many sectors well above inflation. And, says Mike Wiltshire at Hays Montrose, the good times are set to continue, particularly for those in design roles in the M&E sector. “The skills shortage across the board in the M&E sector is certainly not getting any better and work levels in the construction sector are still increasing,” he says.

One solution to the shortage of qualified engineers has been to import them from abroad, particularly from English-speaking countries. “Clients are still looking to Australia, New Zealand and South Africa for engineering candidates,” says Wiltshire. However, the shortage of engineers in may sectors is so acute that, even with the influx of workers from the southern hemisphere, salaries are unlikely to be affected.

Neither is the election likely to change salaries much. Most firms have work lined up for the future, particularly in the healthcare and schools sectors, for which funds are already committed. “I don’t think the election will have too much effect on the construction sector in the near future because most clients’ order books are full to the end of the year,” explains Wiltshire.

Of course, there is one event that might really set salaries soaring. “If London wins its Olympics bid there will be a huge growth in construction work in all sectors, initially in infrastructure projects but then right across the board,” predicts Wiltshire. However you will have to wait unit 6 July to find out if that will be the case.

This survey was compiled by Hays Montrose, a specialist recruitment consultant to the built environment. For a free CD-ROM of the results contact Ben Moller-Butcher on 020 7222 6543 or email: ben.moller-butcher@hays.com