Labor shortage drives wages up in construction sector: Report

ISTANBUL

Costs in the construction sector have been on the rise last year, but higher labor costs were particularly striking, the Turkish Contractors’ Association (TMB) has said in a report, linking high wages of semi-skilled workers to a shortage of labor.

Construction companies are having problems with finding blue collar workers, such as molders, heavy equipment operators, and even regular workers, said the report.

In the sector, monthly wages increased monthly reaching up to 150,000 Turkish Liras ($4,983) at the end of the year, according to the association.

Construction companies are trying to overcome the labor shortage by hiring workers from abroad, the report said.

Such labor shortage problems occur not only in the projects developed in Türkiye but also in foreign countries, it added.

The association suggests that solution to this problem is to make radical changes in current education policies.

“It is important that young people should be encouraged to enroll in vocational schools, which will contribute to finding a solution to the problem if not in the short-term.”

The construction cost index increased by 66.49 percent year-on-year in November 2023 after rising 65.93 percent in the previous month, the Turkish Statistical Institute (TÜİK) reported earlier this month.

Labor costs soared 111 percent compared with November 2022, while the monthly increase in labor costs was 0.19 percent against the 1.5 percent rise in the headline cost index.