Hello, everyone.
This is Enta.
Last December, from the Japan Federation of Construction Contractors' Associations,
"A Request to Private Sector Contractors and Project Owners Commissioning Construction Work"
"Current Situation: Soaring Construction Material Prices and Rising Labor Costs" Pamphlet
That's what was reported.
Japan Construction Industry Federation (General Incorporated Association)
This is it.
Rise in Labor Rates for Skilled Construction Workers
Soaring Prices of Construction Materials
It lists the unit prices as of March 2021 and the rate of increase in those prices for 2023.
Have the quoted unit prices from back then gone up compared to the current ones?
To be honest, the numbers started going up around last year, 2023—it’s really just recently.
It finally feels like the labor unit rate has started to rise at the level of major companies' operating budgets.
However, the reason it isn't rising steadily is
That's because some contractors are still giving quotes at the same rates as before and aren't raising their unit prices.
The general contractor also wants the price to be as low as possible, so naturally they keep quiet. (Grins)
Based on market conditions,
I think it's because they have no desire to invest in their own company or raise their employees' salaries.
I think this is a common scenario among construction companies—the mindset of “As long as we can get by for now (as long as we can make ends meet), that’s good enough.”
With things like this, there are a lot of young craftsmen who lose hope for the future and end up leaving, aren't there?
I guess older craftsmen just stick around at that company because it’s become a bit of a hassle in various ways.
When preparing a quote, I assume you have a general idea of the price range so far.
So you just look at that and figure, "Well, this is probably about right," when you're making an estimate, right? lol
Or are you lowering your rate from the start because you think you won’t be able to land the job at this rate?
There’s really no room left for the general contractor to choose a construction company.
That's because there are fewer contractors now.
That said, I don't think it's right to take advantage of someone's vulnerability, but,
I think this is the time to have discussions about what we want to spend up to and where we want to set the limit.
The general contractor's supervisor is aware of their company's profit margin, so they shouldn't push us too hard.
Since the general contractor will naturally want to protect its profits, it’s important for both sides to discuss and agree on the unit price, isn’t it?
If we can't agree on the unit price, we simply won't be able to do the work—so we won't do it!
Don't take on work at an unrealistic rate
Don't believe the general contractor when they say, "We'll make it up on the next job."
When there's no work, either grin and bear it or try to land business with other companies.
A Closer Look at the Labor Cost Rates Published by the Ministry of Land, Infrastructure, Transport and Tourism
The general contractor's losses have nothing to do with the subcontractors.
The general contractor's actual budget is irrelevant to subcontractors.
Contractors with low construction unit prices will be the first to go out of business
With these factors in mind, we plan to raise our unit prices as a subcontractor and increase construction costs to raise our employees' salaries,
Let's boost construction efficiency by purchasing construction equipment!
See you later.
