The worldwide construction market is looking up, but it is dogged by a lack of skilled workers and low productivity, at least according to Turner &Townsend’s 2018 construction market survey.
The report, released on June 11, looked at 46 of the world’s largest construction markets. It rated the markets as “cold,”“lukewarm,”“warm,”“hot” or “overheating,” using its own system, which is based on the degree of competition among contractors (the “warmer” a market is, the more jobs per contractor there are, reducing competition). The report listed Dublin, Melbourne, Munich, Sydney and Tokyo as hot markets, and Amsterdam, San Francisco and Seattle as overheating markets.
According to the survey, 21 of the markets are expected to “heat up” in 2018, while only two (Kuala Lumpur and Scotland) are set to cool down. The other half of markets are set to remain stable. But, despite the report’s optimistic projections, it cautioned against assuming “easy money,” highlighting the industry’s struggles with finding skilled workers and increasing productivity.
When asked about the major problems they were facing, the number one problem contractors listed was a shortage of skilled workers. In all, 67 percent of respondents said the shortage of skilled workers was having a serious impact on their ability to deliver construction projects, and 27 of the overall markets reported worker shortages as well. This data is in line with other recent reports, including the USG Corporation and U.S. Chamber of Commerce Commercial Construction Index, which found that over 90 percent of American contractors are worried about labor shortages.
The report points the finger at a loss of migrant labor."A consequence of prosperity, global connectivity and growing aspirations is a shrinking pool of cheaper migrant labour, on which historically construction has been reliant,” Steve McGuckin, Turner &Townsend’s global head of client programmes, said in the report’s introduction. “So, with a surge of workload ahead, the global industry faces more work with fewer workers.”
While it is difficult to obtain data on migrant workers, the past few months have seen story after story about the abuse of migrant workers in the construction industry: from nonpayment of wages on the Crimea Bridge and in the Gulf, to contracts that prevent migrant workers from joining unions in New Zealand to a reported 1,200 deaths among migrant workers building Qatar’s 2022 FIFA World Cup stadiums since the work started in 2010. These scandals have emphasized the social cost of “cheap” migrant labor, and may have led to a decline in its usability.
The report also lists other major contractor grievances: government red tape, the rising cost of construction, and low workplace productivity.