Effects of the Thai building boom

[bumper]

May be sometime before I build a house on the farm

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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

[KHONDAHM]

Materials prices have shot up. Red brick, for example, has doubled from 1 baht to 2 baht in some stores. I haven't checked the entire range of materials needed to build, but I'd bet they have all gone up considerably since 2011. Whatever prices didn't will surely go up this year.

Like the skilled independent workers interviewed in the article, I'd bet their rates will go up even higher once they realize their old rate buys less and less skilled are getting what they now get...

[bumper]

Well. it's nice little hobby farm. Might just stay that way.

[eagle]

Materials prices have shot up. Red brick, for example, has doubled from 1 baht to 2 baht in some stores. I haven't checked the entire range of materials needed to build, but I'd bet they have all gone up considerably since 2011. Whatever prices didn't will surely go up this year.

Like the skilled independent workers interviewed in the article, I'd bet their rates will go up even higher once they realize their old rate buys less and less skilled are getting what they now get...

I started to build a house few months ago. Bathroom wall tiles just an example. I November we found a nice one, which was priced to be 189 thb/sqm. We bought those in December and paid 219 thb/sqm. Now price is 229 thb/sqm. Same applies almost to everything. Two months and 20-25% increase.

Other thing to notice is very large stock of "Do not have now". Almost everything we have found and liked is out of stock. I was prepared to that and we started to look things 2 months before the real need. That is enough to get material from factory. So this is an advice to others: If you want to have a specific tiles etc., please do not leave shop visit to the last week before making the floor or wall.

[rct]

If this post iwith a link is against the rules, please delete and forgive me.

The point relates to "value" in Udon Thani, prices going up with the "building boom".

http://www.udonrealestate.com/10418.asp

This FBI link shows a 15 million baht double shophouse, in a city location but not central or downtown. Is near my home with about the same square footage (my house looks better....and has more closets apparently) and is not even on a main road, though is surrounded by some busy noodle shops. It is actually a bit comical to see some of the photos eg 11, 14 and 17.

Shophouses continue to proliferate, while luxury villas are few and far between.

[pienmash]

A good spot rct ,,,,,,, a double shop house 15 mil in at best an ok location ,,, against a nice villa , being bought as an investment/rental the shop house always comes out on top , WHEN BOUGHT AT THE RIGHT PRICE I MIGHT ADD.

I think all must now realise times have are are still changing dramatically here in Thailand/Udon ,,, call it progress or a boom it anit gonna slow any time soon building materials prices will go higher for sure.....and this the same time the manufacturing sector ass is being nailed to the fence with min wages etc ...... as ive stated hourly daily wages have increased throughout industry in turn compounded by increases in fuel charges , delivery and packaging on top of the wage hike ...... no wonder some have walked away or restructured ... AND PRICES ARE SHOOTING UP .

Ring rd shop houses at 3.5 mil now ...in 5 years ?? 10 years ?? ....

mash