Contractors signed up to the National Agreement for Engineering Construction Industry set out the final two-year offer to the 7,000-strong workforce last month

This followed an extra 75p a hour cost of living increase agreed six months ago between unions and contractors.

The employers’ latest two-year offer includes a 8.5% increase in both hourly rates and travel allowance for 2024, followed by a 3.5% rise in 2025, which could be increased to a maximum of 5% if the consumer price index remained above 3.5%.

Employers warned that uncertainly about the future of the UK economy had impacted investment and development translating into the low number of significant new build projects on the immediate horizon.

In a letter to the signatory unions GMB and Unite, John Simpson, MD of the Engineering Construction Industry Association, said:  “Commercial margins within engineering construction remain extremely tight.

“While we hope that some of the energy transition projects will get to a final investment decision in the next 12 months, the prospect of NAECI “boots on the ground” on these projects is still a little further into the future than both parties would like.”

Unions are now moving to ballot members for industrial action after 92% of Unite’s and GMB’s members voted to reject the offer, with 98% of these saying they were prepared to take strike action.

Jason Poulter, construction officer at Unite, said: “Given these results, on a full and final offer, it is our position that we are now in a formal dispute over pay.

“As a result, we will be preparing for a ballot of our members for lawful industrial action.

“However, we remain open to meaningful negotiations and believe it is in the interests of all parties to start such talks as soon as possible.

“An offer to meet and negotiate further will remain on the table throughout the process of preparing for and the balloting of members. I will confirm expected dates of ballots in due course; this is expected to take place between August and September.”