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Larger firms 'hit harder' by downturn

11 Aug 20 An analysis of the subcontractor employment across the UK construction industry suggests that smaller companies are proving more resilient to the economic downturn than larger ones.

Analysis from payroll firm Hudson Contract suggests that large firms have cut 30% of subcontractors since the week before lockdown. SMEs, by contrast, are using only 21% fewer subcontractors.

Ian Anfield, managing director of Hudson Contract, said: “Our figures show how SMEs are leading the recovery in the construction industry. Smaller companies are proving more resilient, agile and adaptive to the new circumstances and are investing in skilled subcontractors to retain productive labour and finish jobs.”

He added: “By contrast, large construction firms tend to work on more complex projects which have been hit harder by the downturn.”

The activity levels of large firms have recovered since the depths of lockdown when the average number of subcontractors paid fell by 77%.

Meanwhile, the average number used by smaller firms dipped by 66%. Hudson compared the average number of freelance tradespeople paid in the weeks commencing 16th March, 20th April and 20th July.  The analysis reflects the labour demands of micro, small, medium and large companies that continued to operate during the period.

Overall, average weekly earnings for subcontractors recovered by 4.8% to £889 during the month of July, the highest number since March.

Source: Hudson Contract
Source: Hudson Contract

Region July 2020 Average Month on Month % change Year on Year % change
Northeast £750 -1.3% -3.6%
Northwest £825 2.2% -5.4%
Yorkshire & Humber £836 9.9% -3.6%
East Midlands £876 7.4% -7.1%
West Midlands £922 3.9% -6.2%
Wales £915 12.0% 12.0%
East of England £966 7.8% 1.9%
London £899 -2.8% -2.1%
Southeast £958 7.8% 3.8%
Southwest £880 0.2% 8.8%

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