Labour crisis threatens Gulf construction
The Gulf could face an acute labour shortage of up to five million workers over the coming five years as competition for wages from booming Asian countries keeps low-cost workers at home, an expert has warned.
The construction sector is likely to be hardest hit with $1.9 trillion worth of projects planned in the Gulf region at risk of being understaffed as a result of the imminent labour crisis, according to a study presented at a forum organised by the Project Management Institute (PMI).
“The golden days of cheap labour from Asia for the Gulf contractors are gone,” said Arabian Gulf Chapter Vice-President Abdulmajeed Al Gassab, quoted Bahrain's Gulf Daily News on Wednesday.
Al Gassab said projects in the Gulf, which rely heavily on professionals and unskilled workers from Asia, were likely to see their costs skyrocket as competition heats up for the global workforce.
“Now with the Asian economy booming, especially in India, such workforces are paid heavily back home and they are not keen on working in the Gulf,” he said.
The US, Europe and Asia are also competing for skilled, cost-effective labour, according to Bahrain Petroleum Company (Bapco) Chief Executive Abdulkarim Al Sayed, also speaking at the forum, which is making it harder for Gulf firms to retain talent.
“Coupled with the still common misconception outside the region, that the Middle East is a dangerous place to work in, it is somewhat difficult to attract foreign professionals to the region,” Al Sayed was quoted as saying.
Al Sayed warned that the result of increased competition would be higher costs for developers and the likely loss of much-needed skilled workers to man the Gulf’s extensive development plans.
“The inevitable result is that employers in the region are going to have to pay inflated prices to attract the necessary resources,” Al Sayed said, adding that the cost hike would “drive up the cost of projects and further restrict the development of indigenous talents”.
The Gulf construction boom is also at the mercy of a supply chain bottleneck for raw materials.
Driven by skyrocketing demand from competing emerging nations, in particular China, the cost of raw materials has bloated in recent years and threatens to derail regional developments, especially those that have not been able to lock in future contracts at agreeable prices.
Source: ArabianBusiness.com
well, insofar as there should be a decent day's pay for a decent day's work and all that.
Gypsy? Did you just wet yourself with that trickle down? oo-er Too much excitement ;D
The problem is there is a shortage of labor at the current price the Gulf is currently paying people.
Many economists (will find the report later have read it) say that there is no shortage of man power the problem is there is an increasing number of people who believe that it is now not worth coming to the Gulf region for the wages paid.
If the wages were higher then the labor would once again come back.
It looks like the chickens are finally coming home to roost. The stories of non-payment, low payment and long hours and no overtime are getting back to India and other sources of traditionally cheap labor. Add to this the GCC dollar peg and labourers real wages have dropped by some 10-20% when sent home.
The problem now is a boom in construction in India, and China, Indians have wised upto the fact that at current market rates it is no longer financially viable to work in the Gulf.
Now if the wages were raised there would be more demand for the jobs here, Traditionally the Gulf has not had to compete for labor, NOW they do, so they will have to increase wages to compete with domestic wages and make coming to the Gulf a more lucrative option.
This is all basic economics, the age of cheap labor is OVER, how long the Gulf takes to realise this will be interesting to see. One thing is for sure the fat profits made off the backs of cheap immigrant labor are over.
They will now have to pay an attractive rate in the Global market.
I have heard of DLF (this is a construction company in India) bringing back its 9000 odd labour force from various parts of ME back to India and saving a lot of cash
DLF has to cope with visa / travel and other rlated costs for them in ME where as the labour cost in India is almost twice than they get in ME.
Labours are happy... as they will (or should I say COULD) earn more and companies will save a lot
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Boooooooo
"When they say he could walk on water, I think of it like he could fly like a butterfly, sting like a bee. Literal people scare me, getting it wrong fundamentally, down at the church of 'Look it says right here see!" Ani Difranco
Sorry to burst your bubble Gypsy, but if the cost of unskilled labour goes up, it means even more inflation
Stay safe.
Perfection does not exist. The question therefore, is: what level of imperfection are we willing to settle for?
It's the trickle down effect Ragna.
"When they say he could walk on water, I think of it like he could fly like a butterfly, sting like a bee. Literal people scare me, getting it wrong fundamentally, down at the church of 'Look it says right here see!" Ani Difranco
I didn't know you were in the construction industry
Stay safe.
Perfection does not exist. The question therefore, is: what level of imperfection are we willing to settle for?
Sweet Bring on the money!
"When they say he could walk on water, I think of it like he could fly like a butterfly, sting like a bee. Literal people scare me, getting it wrong fundamentally, down at the church of 'Look it says right here see!" Ani Difranco