THERE ARE whisperings that the economy is showing signs of recovery, but for 200,000 employees and 12,000 employers in small and medium-sized businesses within the building industry, the climate remains dreadful.

In April 2009 the Building and Allied Trades Joint Industrial Council (BATJIC) confirmed there would be no increase to the pay, allowances and conditions when the current agreement expires in June 2009.

Therefore, the rates introduced in June 2008 agreement will remain in place for another year. This is the first time that pay levels have remained the same for two consecutive years.

Brian Berry, director of external affairs from the Federation of Master Builders is not surprised:

"There are very tentative signs which suggest that maybe we have reached the bottom of this recession, but construction is still at its worst point since the early 1980s. The market conditions are still really bad, just because the recession has slowed down doesn't mean that we are in recovery yet."

His boss Richard Diment, the FMB's director-general said: "The FMB regrets that these negotiations have been concluded without being able to agree some form of increase. However, it has become clear that conditions are not going to improve sufficiently for any form of increase to be possible for this year, and there is clearly a need to provide certainty on wages for firms pricing for what little work there is out there."

The latest 'state of trade' survey, published by the FMB also contains worrying signals that the effects of this recession are far from over. It reports that during the first three months of 2009 73% of FMB builders have reported a decline in workloads in the industrial sector and 66% have reported a decline in the commercial sector.

Even more alarming is the finding that 57% of FMB builders expecting lower overall workloads in the next three months.
The survey also indicates that there may be a slowing in the rate of decline in private housing, public non-residential new build, and public non-residential repair and maintenance.

Diment acknowledges these difficult trading conditions. He says: "The reality of the situation is that the trading environment for FMB members is so dire, that we are simply not in any position to assist hard pressed workers with any aspect of their claim.

"We did explore a number of options with Unite, but the economy has fallen so far and so fast, that we were rapidly pushed past the point where we could consider even modest improvements. The bottom line is that firms are desperately trying to hang on to their workers and it would be irresponsible of us to make it more difficult for them do so by raising wages at this time of massive economic uncertainty and rapid growth in informal economy competition."

Bob Blackman, national secretary for construction at Unite also expressed his regret that BATJIC negotiations failed to result in a pay increase.

"I am extremely disappointed that no increases have been possible for this year. BATJIC has a long record of delivering real improvements in pay and conditions for construction workers and it is a real shame that we have not been able to deliver improvements for our members this year. We are hoping that conditions improve sufficiently for agreement to be reached next year for the 2010/11 pay round."

However an increase in pay next year is far from guaranteed. This will depend on market conditions and how well the construction industry is performing when negotiations begin in 2010.

Berry says: "We hope that the Government is right when they talk about recovery happening by the beginning of 2010, obviously that will have an impact on our discussions at that time, but at the moment that hasn't happened.

"Let's hope that the market picks up because building will be a key part of getting Britain out of this recession." But for now it seems the construction industry is far from being in recovery.