Migrant labor exploitation? Average cost of construction labor drops further in UAE.
The average cost of construction labor fell 6.5 per cent month-on-month in November 2013, as wages of some skilled workers declined accordin to an article in Khaleej Times.
According to Statistics Centre - Abu Dhabi, or Scad, the average cost of construction labor dropped on the back of declines in the wages of electricians by 11.1 per cent and 8.3 per cent in the wages of carpenters and blacksmiths, respectively.
In its monthly report on the prices of building materials for the month of November 2013, Scad however said that wages increased 8.5 per cent year-on-year during the month, reflecting increases in the wages of most of the trades making up the group.
An owner of a small construction company agreed that wages have dropped.
Zubair Mir, managing director of Abu Dhabi-based M/s Perth General Contracting, attributed the decline to several reasons, and said that employers were taking undue advantage of it.
For example, he said that labor market dynamics, currency fluctuations and the economic decline in Asian countries have weakened the workers’ ability to negotiate.
Mir also added that the cost of hiring a construction worker was higher compared with the shrinking profit margins which were lowering due to cut-throat competition.
The wages contribute between 30 per cent to 40 per cent to the overall expenses of a construction company, and any decline in it means rise in earnings, Mir pointed out.
Other problems that have made financial problems worse for small construction firms include delays in payments by the main contractors, which also effects the wages.
The Scad report also compared the prices of construction materials in the Abu Dhabi retail market in November. Slight changes were observed in the average prices of building material groups in November compared with October, with increases ranging from 0.1 per cent for the steel group to 0.9 per cent for the wood group. The average prices of steel rose 0.1 per cent, reflecting increases in the prices of most items within this group. However, the average prices of power cables declined one per cent month-on-month. Scad reported decreases in the average monthly prices of 10 groups of building materials during November compared with the same month in 2012.
The average prices of the block group decreased by 8.4 per cent in November compared to last year, as all of the items constituting the groups underwent a decrease of 5.2 to 13.9 per cent.
The average prices of wires decreased in November compared to a year earlier. Wires for apartments accounted for the largest fall 5.3 per cent.
The steel group declined 7.8 per cent in November compared to the same month last year, showing decreases that ranged between 1.1 per cent in January 2013 and 7.8 per cent in November 2013. However, the average prices of stone rose 18 per cent year-on-year in November.
The average prices of aggregates and sand increased by 17.4 per cent year-on-year, 2013 as most of the items in the group recorded increases ranging between 5.9 per cent and 40 per cent.