THE construction industry is urging Putrajaya to pay attention to labour shortages in the sector, as this could further delay ongoing projects, which would impact on the economy.

Construction players said Putrajaya should also allow them to renew work permits of foreign workers, as the policy of hiring locals is slow to take off.

Master Builders’ Association Malaysia (MBAM) president Foo Chek Lee told The Malaysian Insight even though the government has lifted the ban on foreign workers at construction sites, it does not help when their permits expire and employers cannot renew them.

“Those who are already here and cannot go back, their work permits have expired. So now the entire industry lacks labour, which is very serious,” he said.

Foo also raised concerns that if Putrajaya launches too many construction projects, firms may not be able to handle it because of the lack of manpower.

On top of that, he said, closed borders are preventing foreign workers from entering Malaysia.

Putrajaya previously banned foreign workers from several sectors in a bid to boost local employment.

However, it has only witnessed a slow rise in local employment, especially in the 3D (dirty, difficult and dangerous) sectors, which dominated by foreign workers, including the construction industry.

Although Putrajaya later said it would open re-employment of foreign workers, the construction industry has been unable to obtain supply due because of the closed border.

Foo fears that newer projects, including those announced as part of Budget 2021, would be delayed if the situation remains unaddressed.

“The second half of the year should be better than the first half but it also depends on the overall situation, because the current problem is that the construction industry is still short of workers.

“Some small contractors have projects but can’t do them because there are not enough workers.”

The government encourages domestic companies to hire locals, yet not many are interested despite the wages being higher than other sectors, he said.

The monthly salary can reach up to RM3,000 but getting locals to replace foreign workers is proving to be difficult, he said.

“There are no local employees. Everyone is rushing to hire local employees but no local wants to work in these sectors.”

Foo said Malaysians would be interested in clerical work, being supervisors and other duties, but what the construction industry lacks is basic labour.

“What we need is people to do basic labour on the construction site, so unless this problem is solved, many projects launched by the government may have problems and it will be difficult to complete.”

Shared suffering

The slowdown in the construction industry has also dragged down other related industries.

Among them, hardware, machinery and building materials have only recovered to less than 50% following the shutdown forced by the Covid-19 pandemic.

Many businesses are also facing cash flow problems.

Malaysia Hardware, Machinery and Building Material Dealers’ Association (MHMBA) president Koh Seng Kiat said the current performance of the industry shows that it has only recovered about 40-45%.

Many association members have not paid for their supplies due to the shutdown of projects during the movement-control order period, which affected their cash flow, said Koh.

Some businesses are also affected after the new Perikatan Nasional government reviewed a number of projects, he said.

Some contractors and developers are also affected by strict loan procedures during this period, which hurt their performance, and also their cash flow and repayment abilities.

All these, in turn, affect suppliers as payments due to them are delayed.

Koh said some developers are opting to pay their supplies by handing over completed housing units, but the main problem of low cash flow remains.

“Frankly speaking, the recovery will not be so fast,” said Koh.

“We have 3,000 members. The complaints I have heard recently are all negative because many of our members have not received payments.”

Suppliers are also wary about supplying new stock to developers and contractors who still owe payments.

Apart from these issues, Koh said the government should also simplify related procedures to attract investments, instead of making it difficult for businesses.

According to data from the National Bureau of Statistics in August, the construction industry shrank by as much as 44.5%. – September 17, 2020.