Inflation cuts down construction wages

2012-02-07
From: Macau Daily Times

The purchasing power of workers has dropped by almost 11 percent in just one year due to high inflation, despite the increase in the average construction wage for the second consecutive quarter.
According to data released by the Statistics and Census Service (DSEC), the average daily wage of construction workers increased by 2.5 percent quarter-to-quarter to MOP 583 in the fourth quarter of last year.
After dropping to just MOP 547 at the end of last June, as the construction of Cotai resort Galaxy Macau finished, wages have recovered in the second half of 2011 while the works of Sands Cotai Central were picking up steam.
The average daily wage of skilled and semi-skilled workers rose by 2.1 percent to MOP 593 but that of unskilled workers grew much slower, by just 0.8 percent to MOP 366.
Electricians and electrical workers got the biggest boost as their salaries rose 11.4 percent to MOP 627. On the contrary the wage of structural iron erectors decreased by eight percent to MOP 617.
However, after discounting the effect of inflation, the wage index of construction workers was down by 1.6 percent quarter-to-quarter in real terms. Yearly inflation reached 6.81 percent in December, a three-year high.

Work prospects

In just one year the purchasing power of construction staff dropped by 10.8 percent. The index is now at just 90.5 points, which means that workers are able to buy fewer goods today than in 2006, when the index was set at 100.
And life is likely to get even more difficult for construction staff this year, as the only major ongoing project, Sands Cotai Central, is slated to open this spring. At the end of September almost 18 percent of all unemployed, around 1,300 people, had lost work in this industry.
Hope comes from the possible expansion of public investment, as the government juggles the construction of 19,000 public housing units, the Light Rapid Transit system, the Zhuhai-Hong Kong-Macau Bridge and the development of Hengqin Island.
The information released by DSEC also highlights another possible factor in soaring housing prices: the increase in constructions materials.
Even though the rise tapered off in the last quarter to just 0.3 percent, for the whole of 2011 the average price index of construction materials for residential buildings increased by 16 percent year-on-year.
The main factors for the soaring costs can be found in the two most important materials, steel and concrete. The price index of steel rose 23.7 percent last year while the price of concrete increased even faster, by 32.1 percent.

Copyright Macau Daily Times