Building costs with rising labor costs

Anything to do with prices. Raw material prices or prices for finished material (or labor such as well drilling). Project prices (how much will it cost??), etc.

Moderators: Sometimewoodworker, MGV12, BKKBILL

Building costs with rising labor costs

Postby pdebuck » Sun Jan 27, 2013 1:47 pm

Hi all,

Probably thinking of starting to build pretty soon.

As we all know, in the very near past the wages of Thai workers have been seriously been bumped up by Ms. Yingluck's government, so a lot of the posts on this forum probably will be based on much lower labor costs.

I have no idea personally, but a building guy I know pretty well in the Pattaya area has told me daily wage for a reasonably skilled worker hovers between 350 and 400 Baht/day, and just plain dumb helpers are stuck at the legal minimum wage of 300 Baht.

Not that long ago one could easily find helpers (Thai, not illegal foreigners), usually 16 year old and upwards children of construction workers entering the job market at not much over 230 Baht/day. With these helpers being bumped up to 300, obviously the skilled workers also expect an increase!

Careful reading of the site seems to indicate the average labor only construction cost of a house to be 1900 Baht/sqm, obviously cheaper upcountry and more in places like Pattaya/Phuket etc...

Pattaya always hovered between 2700 - 3500 labor only, what would be fair prices now???
pdebuck
 
Posts: 3
Joined: Sun Jan 27, 2013 1:32 pm

Re: Building costs with rising labor costs

Postby maximus » Sun Jan 27, 2013 3:58 pm

pdebuck wrote:
Careful reading of the site seems to indicate the average labor only construction cost of a house to be 1900 Baht/sqm, obviously cheaper upcountry and more in places like Pattaya/Phuket etc...


hello pdebuck,

I.M.O. the above has sailed into a lovely sunset

UNLESS

unless u have the necessary know how, plus a strong mentality, to hire labour on a daily basis

the engage a builder on a contract basis side of the equation, no doubt costs have soared very high,for a raft of reasons,and no guarantee of a sucessful build being completed

you have opened a tasty tin of worms, and do hope members on the frontline,plus the estabalished ones, respond to your opening post, as a update on CTH,on a very important topic,would benefit all members and guests

do thank you for your time

maximus
User avatar
maximus
 
Posts: 23
Joined: Wed Jan 23, 2013 9:52 pm

Re: Building costs with rising labor costs

Postby pdebuck » Sun Jan 27, 2013 5:43 pm

I'm actually in Thailand already for a few years and have done a few things on my current house.

Hence sourcing and buying materials would not be too hard for me, so would love to know the current fair labor only cost (by a constructor, not just the workers!).

In Pattaya they used to quote around the 3000 Baht/sqm mark for labor only on a build between 150 - 300 sqm.

Knowing fair price before I start asking for quotes might give me a bit of a negotiating edge :D

As said, pretty much everything to be found on this site dates from before the rather steep salary adjustments forced onto the companies by the government!
pdebuck
 
Posts: 3
Joined: Sun Jan 27, 2013 1:32 pm

Re: Building costs with rising labor costs

Postby BKKBILL » Sun Jan 27, 2013 11:26 pm

Since your probably thinking about starting to build pretty soon and you have approved plans guess the best thing to do when and if you start would be to get a few quotes that should help you get the the current fair labor only cost.

Prices for building a home for the most part have been on the rise long before this so call universal increase.

If the daily wage for a reasonably skilled worker hovers between 350 and 400 Baht/day in your area then you are still well under the new minimum rate.

Do believe that rather steep salary adjustment forced onto the companies by the government should get upcountry workers a little closer to the wages that have been paid to workers in BKK for years.
It's not who you know, it's whom you know.
User avatar
BKKBILL
 
Posts: 2943
Joined: Tue May 26, 2009 10:05 pm
Location: Mae Taeng, Chiang Mai

Re: Building costs with rising labor costs

Postby Roger Ramjet » Mon Jan 28, 2013 4:31 am

BKKBILL,
I totally agree with what you have written about wages to workers whether they be in Bangkok or up country. The day we (us Farangs) start bitching about paying a worker 300 baht for a day of their labour is the time to shut-up shop and go home. 300 baht in my country is less than $10. In fact the day that Thais start bitching about paying their countryman 300 baht a day for their labour is the day they should also close their "enterprise" and leave Thailand. That's less than 8,000 baht a month and I defy anyone to live on that and enjoy the fruits of their labour.
I've gone into this discussion about working out the cost of building per square metre for a build a few times and it just doesn't work that way in reality. Each separate job works out differently in cost. How can anyone work out how long it will take an electrician, tiler, renderer or painter to complete a job? It can only be estimated as prices of everything from cable, tiles, cement, sand, gravel and paint change the whole time. And if anyone can tell me what a builder in Thailand pays himself, then I think he's a magician and has pulled the proverbial rabbit from the hat.
The only constants are that you either supervise all day long and get a reasonable job done, providing you know what you are doing....no matter what it costs in labour, or you pay a Thai "builder" to do that and get a poor job in 90% of the cases.
I defy anyone to come up with a cost per square metre for a house no matter where they live in Thailand, there are just too many variables.
User avatar
Roger Ramjet
 
Posts: 5252
Joined: Tue Apr 27, 2010 12:55 pm

Re: Building costs with rising labor costs

Postby pdebuck » Mon Jan 28, 2013 7:32 am

I partly agree with both Bkkbill and Roger salary wise, but it will not be me employing people, but a constructor.

Not particularly for his "skills" or "knowledge", but rather to be getting a package including workers, maybe a camp built onsite and importantly all the equipment to do the job!

I've been looking around a bit, and you don't really have to stretch to end up between 100,000 and 200,000 Baht worth of (decent) equipment.

I posted this question after reading of many members here having stuff built paying local workers between 220 and 300 Baht/day (upcountry) and stating that because of this constructors are making a killing and having a huge mark-up.
Which I personally do not agree with, I have been doing business in my home country, and it doesn't work that way. As an employer you carry a fair bit of risk, days you do not have work but salaries have to get paid, investment in materials, a truck, monthly overheads, you name it. You stick your neck out, invest and carry the risk, you want a better return then what a worker would make in salary!!!

So I'm quite happy to let a constructor make a couple of 100,000's to keep him in business and keep his equipment/staff working. I'll be on-site on a daily base to follow up anyway.


This all of course does not mean I'm willing to pay stupid prices, the constructor does not have to make millions in just a few months :P


Just fishing on where fair prices are at the moment, because I, just like Roger, have no idea how much labor exactly goes into a house, whereas constructors should, roughly anyway...
pdebuck
 
Posts: 3
Joined: Sun Jan 27, 2013 1:32 pm

Re: Building costs with rising labor costs

Postby Mike Judd » Mon Jan 28, 2013 2:43 pm

I think we all agree that the average Thai worker gets a pretty poor deal when it comes to wages compared to the prices of most other things. He has a long way to go before he catches up with Western standards where the ratio is around the 60% for labour and 40% for materials. On my first build of the Garage /Storeroom it worked out at 90% materials 10%labour, granted I was there 100% of the time supervising 2 guys and not with those Football team strength gangs of workers that seem to be popular with most building projects. I have always paid a min of B400 per day plus plenty of Perks and I will make sure they get a big surprise when it's all finished . That said I still can't work out the high cost ,to Thai's , of say , a bag of cement that at B300 per day, takes about 3hrs wages. Can you imaging what would be said if they tried to sell cement in Oz for even the min wage amount of $16hr ( plus benifits) that's $48 per bag instead of the present price about $13 . I think Siam Cement must be doing O.K.
Mike Judd
 
Posts: 1403
Joined: Tue Mar 22, 2011 7:31 am
Location: Church Point Sydney N.S.W. Australia. Khon Kaen

Re: Building costs with rising labor costs

Postby BKKBILL » Mon Jan 28, 2013 3:25 pm

Guess worrying about that intolerable 300 Baht wage will not be the big problem for a build seems just getting labour will be that problem.

This from the Nation today. http://www.nationmultimedia.com/nationa ... 98824.html

Skilled labourers see daily wages climb
Thanapat Kitjakosol
The Nation January 28, 2013 1:00 am

Keep Moo Road day-labour market thriving; workers earning between Bt500-Bt900

While SMEs are crying over the blanket Bt300 wage, fierce competition in some industries and the scarcity of skilled workers is pushing the daily pay of some above Bt500.

For the past eight years, Narong Jampatho, 30, a tile layer, has never found difficulty in finding someone willing to pay him Bt700 per day, allowing him to earn Bt20,000 a month. Some of his relatives from Nong Bua Lamphu are also in Bangkok at his persuasion.

"It's not a permanent job, but I enjoy my freedom. I work to get paid and rest when I want to. Working for a company is tiring and pays less. The government's wage hike policy has no merit for us, as we've been earning at least Bt500 a day since the floods," he said.

Narong is one of about 10,000 workers living along Keep Moo Road, which, according to the master's thesis of a Sri Pathum University student, is now the country's largest day labour market, mostly for the construction industry.

Most are from northeastern provinces like Buri Ram, Si Sa Ket and Surin. Mixing with them are migrants from Myanmar, Cambodia and Laos who can speak Thai. They demand at least Bt500 a day, while the very skilled ones can command Bt900.

Prakiat Kaewkhamharn, 48, an electrical system contractor, said he pays Bt600 for tile layers. "It's high but we have to take it, as we can't find other workers."

At dawn every day, the day workers line up for one kilometre on the small road, which connects to Ram Intra Road, waiting for contractors or employers. It has become the usual scene for contractors in their pickup trucks to show up, while even individuals who want to do small-scale renovations to their houses bypass builders and come and pick up workers with the skills they require.

BURGEONING DEMAND FOR SKILLED WORKERS

For big or small projects, wage negotiations are necessary as the skilled workers quote at least Bt500. These contractors have to yield to get the best workers at the lowest rates.

Thanks to the burgeoning demand for skilled workers due to the 2011 flood and recovery in property sales, these workers can insist on above-normal rates for their work.

Five years ago, only 3,000 workers sold their labour here, estimates Prasit Sakuma, a Muslim community leader. Their numbers shot up last year, when the need for extra labour to fix flood damage was very high. About 70-80 per cent of them would find jobs every day, while the rest, who had low skills or were choosy or lazy, could get hired every few days.

According to the thesis authored in 2011 by Phinyo Bunchuay, the community's original members were only 935, mostly Muslims, in 185 households. The paper's estimate of the total pool of workers by then is 5,000-8,000.

"The workers bring in good money, with Bt2.5 million in cash circulating every day. The areas that used to be farms and weed patches are now full of housing and apartments," said Usaman Kaewkes, leader of a nearby Muslim community that shares the Arabic name of Keep Moo with an old mosque in the neighbourhood.

Most of the many accommodations for low-income earners are low-priced quarters built in and around the road. The area is also filled with mom-and-pop shops and grocery stores whose sales have surged along with the increase of workers living there and those living elsewhere who come and go.

Land prices have also soared to Bt10 million per rai from Bt2 million just 10 years ago.

However, the hordes of workers migrating to Bangkok looking for better opportunities means more crime, and especially frequent drunken brawls among workers, which is not welcomed by the original, mostly Muslim residents of the area.

The Islamic culture was under threat, with booze being widely sold and drunk. However, about 80 per cent of the workers behave and police have taken care of the troublemakers.

Keep Moo Road could grow more famous, as the labour deficit - now topping the list of business risks for property and construction firms in 2013 - could worsen. With a low unemployment rate of 0.6 per cent, or only 232,400 jobless, the construction, infrastructure and manufacturing industries are now facing a shortfall of about 200,000 hands.

Bank of Thailand data also show that the labour market has tightened. Employment was up 0.7 per cent to 39.2 million as of September from the same month last year, while the average paycheque also rose by 7.9 per cent.

The rush for manpower is anticipated to pick up when the government's mega infrastructure projects are kicked off. While they will attract minimum-wage workers, it also means abundant openings are out there for skilled ones who can charge well above Bt300 a day.



Keep Moo Road: located in northern Bangkok, off Ram-Indra Road

Population

10,000 Workers

935 residents, mostly Muslims

Daily hire rates

Bt500 for basic labour

Bt500-Bt900 for skilled work

Skilled workers:

breakdown in types of work

Bt600-Bt700: Tiler

Bt800: Welder

Bt600-Bt900: Plasterer

Bt600-Bt800: Carpenter

Bt600-Bt700: Electrician

Bt700: Painter

Bt500-Bt600: Planter/gardener
It's not who you know, it's whom you know.
User avatar
BKKBILL
 
Posts: 2943
Joined: Tue May 26, 2009 10:05 pm
Location: Mae Taeng, Chiang Mai

Re: Building costs with rising labor costs

Postby Mike Judd » Tue Jan 29, 2013 5:07 am

Good luck to those Workers around Bangkok, but it's all relative to the cost of living, I should think the prices are all going up as well, supply and demand sort of thing.! I wonder how long it will be before the Gov will want a slice of those relative high wages.? Then the question of it will be ,"Is it cash or on the books"? Still they have a long way to go before it gets like here in Oz with strong unions as well as horrific taxes. The Cash economy is still here, especially in the building industry, with Fly by Nighter's not wanting to pay wages, plus 32 Annual and Public holidays/12 days sick days/ rostered day of each month/Super and Termination money,no working in the rain, and then Unfair dismissal laws to try and avoid if you have a bludger on your books. No with all it's little Pitfalls, I love building in Thailand.
Mike Judd
 
Posts: 1403
Joined: Tue Mar 22, 2011 7:31 am
Location: Church Point Sydney N.S.W. Australia. Khon Kaen

Re: Building costs with rising labor costs

Postby Roger Ramjet » Tue Jan 29, 2013 5:48 am

Mike Judd wrote:I should think the prices are all going up as well, supply and demand sort of thing.! I wonder how long it will be before the Gov will want a slice of those relative high wages.? Then the question of it will be ,"Is it cash or on the books"?

Mike Judd,
You do need to read a little and stop being the whinging Pom, the government here just increased the ceiling cap for low income earners so that PEOPLE earning less money don't pay tax. You might like to lay the blame on the rather large industries here who refuse to pay their workers a living wage. You could start with Siam Cement Group (won't mention which family owns most of it, because I don't want to spent 18 years in gaol). Up the workers and the unions.
You could also investigate Economics 101 (it's on line) and the fact that wages increase because the cost of living increases.... but hey, this is Thailand, why should the peons be paid anything for the work they do.
User avatar
Roger Ramjet
 
Posts: 5252
Joined: Tue Apr 27, 2010 12:55 pm

Re: Building costs with rising labor costs

Postby maximus » Tue Jan 29, 2013 7:21 am

pdebuck wrote:

Just fishing on where fair prices are at the moment, .


hello pdebuck,
will wet a line with you
purely from my observations.I.M.O. with out going into the boring and long details as to why,

a price of 2,5000 baht sq metre appears to be bottom, and then rising accordingly with nature of the build

sure there will be cases of less, but the above price is based across the board

personally i would work on a 3.000 baht metre budget with a minium of 10% increase in place ,to take care of unforseen costs, and alterations , that do arise during a build

your best approach is to have your plans drawn up,(as b/bill rightly mentioned) and cast the the net to at least three builders for estimates

maximus
Last edited by maximus on Tue Jan 29, 2013 7:44 am, edited 1 time in total.
User avatar
maximus
 
Posts: 23
Joined: Wed Jan 23, 2013 9:52 pm

Re: Building costs with rising labor costs

Postby thailazer » Tue Jan 29, 2013 7:42 am

p-buck..... One way to get around worrying about rising costs is to get the builder to give you an all-up labor cost before you begin. You will need a good Thai plan in place first and then write up a short contract. We did that and it worked out well. Our contract stated three payments during the build based on progress but we ended up paying by the month to help the builder out. We were quite satisfied with the quality and progress so had no problem with that, but would have withheld payment if not. (We did delay the last payment until they cleaned up the construction debris which was substantial.) At any rate, by setting a labor cost out front, you don't have to worry about rising costs during the build, and you can buy the material yourself to ensure quality and no cost uplift by the crew.

Make sure you ask prior customers about how the crew performed and their level of trustworthiness. Our build crew had a very good reputation with past builds, and we heard some real horror stories of other crews that were interested in our money.
thailazer
 
Posts: 650
Joined: Sun Jun 26, 2011 9:55 am

Re: Building costs with rising labor costs

Postby Shastadad » Tue Jan 29, 2013 9:22 am

p-buck..... One way to get around worrying about rising costs is to get the builder to give you an all-up labor cost before you begin.


Which also means that if your contractor disapears on you, you are also out the "labor" money that most demand up front when you sign the contract

My experience was that once the contractor got the labor money (which is really his profit in advance) and he reached a break even point, where it was going to cost him to finish the job, it was cheaper for him to just walk away

They are not afraid of consequences because no lawyer will take a case unless you pay them up front, thereby forcing you to throw away good money after bad

The other disadvantage is that when the contractor controls the labor costs he will obtain subs on their schedules, not necessarily based upon the projects needs, since they will work cheaper when they need the money. When subs disapper then the cost of getting someone else to finish a started project can rise substantially ( I say this after 4 plumbers, 5 electricians, and 6 tilers, for my house build)

Just anticipate that the project is going to cost you at least 20% more than estimated at the low end, and 50% more at the high end
Shastadad
 
Posts: 413
Joined: Wed Mar 31, 2010 12:02 pm

Re: Building costs with rising labor costs

Postby Mike Judd » Tue Jan 29, 2013 1:17 pm

Roger "Old Son" I don't know why you have to start most of your posts with a trite remark ! but that aside, as far as reading is concerned didn't you read my first post about big Thai companies (Siam Cement being just one) charging prices way out of line compared to the low wage structure that exists in Thailand. I would be the first one to agree that workers wages are far too low to cope with the ever increasing cost of living in Thailand now that western style living is being more or less forced onto them with the necessity of some form of transport which needs fuel and electricity etc; for all those things we have taken for granted all of our lives. I can't say I am a fan of Unions having been on both sides of the fence and seen what it develops into once a country gets out of it's "Them and us " stage with Workers conditions never been better in Oz . Then it's all about Power even if it means businesses closing down and workers losing what job they did have . You may or may not agree, that's yours and my provocative. Thailand is a different story though, whether Unions would be the answer to get some sort of fairness to it all remains to be seen, as long as we don't get too much violence along the way. With your other comment," wages go up because prices go up "
I would have to disagree again, prices usually go up mainly through costs rising (except when there are shortages) I will give you an analogy if I may. Just taking my Industry ,Building,which has one of the highest add on costs apart from wages of 75% to cover all that I put in my post, plus administration. So the union gets it's members a $10 rise, that cost the company $17.50 with it's overheads, and has to raise it's prices by at least that amount. But the worker after taxation is lucky to end up with $5 to cover the ever increasing inflation chasing it's tail. All the Oz governments of both persuasions loved Inflation, it put the ordinary worker into the top tax bracket over the course of a few years because they never had tax indexed against inflation. Talk about sheep being looked after by wolves. Havagoodun.
Mike Judd
 
Posts: 1403
Joined: Tue Mar 22, 2011 7:31 am
Location: Church Point Sydney N.S.W. Australia. Khon Kaen

Re: Building costs with rising labor costs

Postby Roger Ramjet » Tue Jan 29, 2013 1:52 pm

Mike Judd,
I might point out, as I have done previously, that we are all "Building in Thailand" not Australia and we are talking about wages in Thailand, not Australia. If everyone equated wages in Thailand to their home country we would be talking in circles because each country is different to Thailand.
I know what you posted about SCG (Siam Cement Group) which is why I used it as an example of keeping the "serf's" in their place, which is what Thailand is all about. Perhaps a quick browse about "sufficiency economy" and RHB and CPB might be in order, that way the richest XXXXXXX in Thailand and the world might actually pay the serfs a living wage, or would that be too much to ask? There are a number of academic papers on the subject, however, me being in Thailand I'm not allowed to read them, but you being in Australia are.
The objective of a union is just that, collective wage bargaining and improving working conditions....in other words leveling the playing field just a little, and I say just a little, when you look at the money owners and managers pay themselves compared to the workers, and in Thailand what builders, and I use that word loosely, pay themselves in relation to their workers.
Shashadad summed it up quite well and didn't even bitch about what "his country" had to do with the wages in Thailand.
User avatar
Roger Ramjet
 
Posts: 5252
Joined: Tue Apr 27, 2010 12:55 pm

Next

Return to material prices & building costs

Who is online

Users browsing this forum: No registered users and 1 guest