Unions and employers in Germany's construction industry on Wednesday agreed a pay hike of around five percent for some 750,000 workers in the sector. 

The employers' federation, ZDB, and the union IG Bau said they have agreed a pay increase of 4.6 percent for workers in the west of the country in two stages over a period of 22 months. And workers in the east of the country will receive an increase of 5.3 percent. 

The deal was reached after an "extremely tough" 14-hour round of negotiations that lasted until the early hours of Wednesday, the union said.

It comes just days after unions and employers struck a 4.8-percent deal for 3.8 million workers in the powerful metalworking industry, setting the tone for most other key sectors of Europe's biggest economy. 

With consumer spending also becoming an increasingly important pillar of economic recovery in Germany, economists hope the rising wages will provide additional momentum to growth as households' purchasing power increases.

In the past, salaries in Germany have risen only moderately, helping to boost the competitiveness of German companies. 

But with many sectors of industry increasingly complaining about a shortage of qualified manpower, unions have used this as leverage to secure bigger pay increases.