Construction Sector Can Breathe A Sigh Of Relief: MIDF

(photo credit: ASEAN Briefing)

The Government has given the green light for three crucial sectors – construction, manufacturing and services – to hire foreign workers from all the 15 permitted source countries as stipulated by the Home Affairs Ministry. This is on top of the approval given to a proposal by the Construction Labour Exchange Centre Bhd (CLAB), an organisation under the Construction Industry Development Board (CIDB), to fully manage the entry of foreign construction workers involving more than 100 people.

These will provide much relief for the construction sector, which has been plagued with the issue of labour shortage, triggered by the MCOs in 2020 and 2021 that saw many foreign workers returning to their originating countries, including those that caught their employers off guard by fleeing illegally. Alternative sources. The Government’s latest decision opens up the avenue for construction companies to hire workers from other countries such as Thailand, Cambodia, Nepal, Myanmar, Laos, Vietnam, the Philippines, Pakistan, Sri Lanka, Turkmenistan, Uzbekistan and Kazakhstan.

This is a vital move at a time when Indonesia has put in place a hiring freeze stemming from what seems to be a misunderstanding on the online systems to be used for hiring domestic helpers from Indonesia. We gather from the industry that Indonesian construction workers are generally preferred as they are higher skilled. Since that option is off the table now with the temporary hiring freeze by Indonesia, we believe that the next in line in terms of preference will be workers from Bangladesh, apart from all the other countries that construction firms can now hire from.

About 600,000 needed. The construction industry currently needs about 600,000 foreign workers as industry players ramp up their operations with the reopening of the economy and as they gear up for upcoming infrastructure contract rollouts, starting with the MRT3 in 4QCY22. Pre-Covid, the construction sector’s number of filled jobs peaked at 1.31 million people in 4QCY19. This dwindled to 1.22 million people as of 1QCY22, a reduction of -6.8% or 88,600 people, according to DOSM’s
quarterly employment statistics.

A shortage of labour causes delay in work progress, which may lead to penalties or Liquidated Ascertained Damages
(LAD) claims. Contractors have no recourse in these situations.

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