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Construction costs rose by 15% on labor shortage, say builders

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By Jenina P. Ibañez

CONSTRUCTION projects take on an additional 10-15% in costs due to a shortage in skilled construction workers and necessary equipment, Chamber of Real Estate and Builders’ Association (CREBA) Chairman Charlie A. V. Gorayeb said.

In a phone interview on Thursday, Mr. Gorayeb said the industry employs additional workers to make up for the lack of training and equipment.

“If you have unskilled workers, dinadaan na lang sa dami (you just employ more). We have five workers doing masonry, where in some other countries, two people are enough to do it because they have complete equipment,” he said.

Building projects encounter years-long delays and wastage of materials, he said.

On the other hand, Subdivision and Housing Developers Association (SHDA) Executive Director Santiago F. Ducay said in a phone interview on Friday that additional costs are shouldered by the private sector making up for the training gap.

“In some way, it raises the cost because there’s training costs and the learning curve that has to be awaited,” he said.

Mr. Gorayeb explained that the construction industry has been experiencing its skilled labor shortage for years, but this shortage has been emphasized after the government started its Build, Build, Build infrastructure program.

“The government embarked on a huge construction program without training workers,” he said.

“They all know that long before and nothing was done. And it became even more obvious and problematic when the government went into a trillion (peso) infrastructure (project).”

The Duterte administration in November released a revised list of flagship infrastructure projects, increasing the number to 100 from 75. The government is pushing for 56 of these projects to be completed by the end of 2022.

The construction industry every year addresses the housing needs of a growing population.

“The housing industry needs to build one million housing units yearly to satisfy population requirements,” Mr. Ducay said, adding that the sector also addresses housing losses due to calamities and dilapidation.

To solve the skilled labor shortage, both the government and the private sector should invest in upskilling programs, including on-the-job training, he said.

Mr. Gorayeb said contractors are can be partly blamed for the shortage as they do not engage in formal skills training for construction workers.

But even as skilled workers are trained by the government through the Technical Education and Skills Development Authority (TESDA), the same workers move abroad in search for higher wages.

“What the government is doing is train (workers) at TESDA and then send them outside (the country). As long as we do that then we don’t train for the (domestic) labor requirement,” Mr. Gorayeb said.

DMCI Holdings, Inc. Chairman and President Isidro A. Consunji last week said he expects the take home pay of workers to increase as the construction industry continues to experience labor shortages. He said that the take home pay of workers must increase as the construction industry continues to experience labor shortages.

“The government should revisit and review the wage structure for more competitive wages,” Mr. Ducay said.

The average daily basic pay in the industry has increased from P319 to P376 from 2013 to 2017, according to the National Wages and Productivity Commission.

According to preliminary data from the Philippine statistics authority, the construction industry in 2019 had an estimated 4.2 million jobs, compared with 3.9 million in 2018.





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