More young people are joining Hong Kong’s construction sector, with the majority of recent trainees aged under 35, but many do not take up employment in the industry after they complete their training. More than 40 percent of construction workers aged 50 or older.

Secretary for Development Eric Ma Siu-cheung said that between 2009 and 2016, the Construction Industry Council trained more than 24,000 semi-skilled construction workers. About 60 per cent of them were below 35-years-old, well below the average age of 46.

“This shows that many young people are interested in joining the industry,” he said.

But real estate and construction lawmaker Abraham Razack said the figures do not show the “real situation” as the success rate of retaining trained young talent remained low.

“While [the council] has said [it] has trained more people, training more people and keeping people in the industry are two different things,” he said.

“When [young people] are training, they are there for a couple of months … they have a lot of [employment] choices after they are done. The number being trained doesn’t mean they are actually working in the industry.”

Trainees are paid while they are learning new skills, which acts as a buffer for some young trainees who are looking for a new job, Razack added.

He did not think offering more pay would solve the problem as “their pay was quite high at the moment”, due to the increasing construction costs and chronic construction labour shortage.

Ma revealed the number of registered construction workers had risen from 270,000 to 430,000 from 2009 to 2016 – an increase of 59 per cent. The number of skilled and semi-skilled workers also rose from 107,000 to 214,000.

Yet the industry still faces a shortage of between 10,000 and 15,000 workers for the next few years, he added.

Razack said better hours and eliminating the “perception problem” of working in the construction industry could help retain young talent.

source: SCMP

Hong Kong’s construction labour costs have vaulted 25 percent in the last 12 months, elevating the city into the third spot among the most expensive to build globally, trailing only New York and San Francisco, and stoking concerns of runaway home price inflation.

The average construction cost in Hong Kong amounted to US$3,704 per square metre in 2017, up 6.2 percent year on year, according to global project manager, Turner and Townsend. 

Labour was the single largest driver of inflation in building construction costs, with the average hourly wage in Hong Kong rising to US$15 per hour, up 25 per cent year on year, according to the report.

In comparison, hourly construction labour costs in Singapore are US$13.

Vanessa Cho, quantity surveyor at Turner and Townsend, said that the shortage of skilled labour will further push up the construction costs in the city in the coming next few years. 

“The public and private sectors are competing for the same resources from the same labour market. It is expected that with the shortage of skilled labour, wage costs will continue to increase and in turn further raise the cost of construction,” said Cho. “The challenge for the construction labour market is not just about the lack of numbers employed. The workforce is old, ageing and inflexible.”

According to the Hong Kong Construction Association, about 42 per cent of the Hong Kong construction workers are above 50.

It is expected that the construction costs will rise by another 4 percent in the city in the coming 12 months. 

“Higher construction fees will drive up the input [costs] of developers. Together, with the soaring land price, it is likely they will hold back completed units and only release the houses when the market price meets their expected return,” said Alvin Lam, a director at Midland Surveyors. “It will impact the home supply and thus may result in an even higher home price in Hong Kong in the coming years.”

Lam said that the construction cost usually account for 20 per cent of the price of a residential flat. 

Hong Kong home prices have been surging for 24 consecutive months, the longest stretch for a property bull market in a quarter century. Market observers forecast 10 per cent growth in prices for 2018. 

Still, Hong Kong’s high construction labour costs have been a regular fixture on the local development scene for some time. This year’s list saw Hong Kong climb one position, surpassing Zurich. New York topped the list with US$3,900 per sq m while San Francisco took the No 2 spot with an average construction cost of US$3,736 per sq m. 

Around Asia, building construction prices in Tokyo averaged US$2,560 per sq m, while Singapore was US$2,137 per sq m. 

On the mainland, Shanghai recorded the highest construction costs among major cities at US$807.3 per sq m.

source: SCMP