The Construction Plant-hire Association (CPA) said the tower crane operators dispute is driven by falling workloads and higher employment costs, which have stripped employers of the capacity to meet further pay demands
Government policy failures have created a “perfect storm” of weak demand, rising costs and escalating industrial disputes such as the tower crane operators strike, according to the CPA.
New data from construction analysts Glenigan underlines the scale of the slowdown, with the total value of projects starting on site falling by around 20% in 2025, while civil engineering activity dropped 56% year-on-year. Main contract awards fell 11%, while planning approvals are at record lows, leaving a fragile and uncertain pipeline for 2026.
Projects have slowed, whilst costs have risen
That collapse in activity has translated directly into poor utilisation across plant fleets. Employers faced prolonged periods of low demand throughout 2025 as projects delayed from 2024 and 2025 failed to materialise, exacerbated by regulatory uncertainty and the mishandling of Gateway 2.
At the same time, firms have absorbed sharp increases in employer National Insurance and the minimum wage, pushing up baseline employment costs just as revenues have been falling. Subdued demand has also allowed clients to force down hire rates amid oversupply, further squeezing margins.
In the current dispute, crane rental firm Wolffkran said average crane utilisation has fallen 26% since 2016, the number of cranes on hire has dropped by around 40%, and average rental rates have declined by 20-25%, leaving little headroom for further cost increases.
Steve Mulholland, chief executive of the Construction Plant-hire Association, said:
“This dispute is the product of a perfect storm created by Labour. Construction activity collapsed throughout 2025, yet employers were hit with higher National Insurance, higher minimum wages and growing regulatory burdens at exactly the same time.
“Plant-hire firms stood by their workforce through long periods of poor utilisation, but cash has been draining out of the sector for over a year. Highly skilled operators understandably want to protect pay differentials, but those expectations are colliding with the reality of a market where work has dried up and hire rates are being pushed down.
The government “must start creating a stable, pro-investment environment”
“The government’s continued support for a big-state, high-tax approach is exacerbating the problem. Employers cannot give in to unrealistic demands when policy decisions have stripped work out of the market and driven costs up simultaneously.
“If Labour is serious about delivering 1.5 million new homes, it must start creating a stable, pro-investment environment – by unblocking delayed projects, fixing regulatory bottlenecks, and easing the tax burden on employment. Without that, these disputes will keep happening and delivery will fall further behind.”
The CPA warned that unless confidence is restored and investment unlocked, industrial relations across construction will continue to deteriorate – undermining the supply chain needed to deliver homes, infrastructure and economic growth.
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