CONSTRUCTION
“REMITTANCES FROM OVERSEAS ARE A POOR SUBSTITUTE FOR A HIGHLY QUALIFIED LOCAL WORKFORCE”
Anew mode of trade has emerged – at least in the construction industry – where overseas suppliers expect an advance of 50 per cent of the total payment of an order.
And suppliers want 100 per cent payment, prior to shipment of orders, the Construction Industry Council of Fiji has revealed. “This can cause cash flow difficulties for contractors, if developers have not been forewarned that such advance payments will be required,” council vice president, Jon Orton, said.
“The cost of construction has increased considerably over the past 18 months as a result of this demand.
Local material costs such as cement is up by 40 per cent, steel prices are up by 35 per cent, and timber prices up 40 per cent.
“There is on-going difficulty of supply of items sourced from overseas because of the surge in construction in Australia and New Zealand.
“This has led their suppliers to concentrate on their local market before servicing overseas markets.”
Outlook
In the meantime, the construction industry remained “very buoyant” with the high demand for new developments, including resorts, commercial offices, and residences, Mr Orton said.
Schools, offices, resorts and institutional buildings are among a host of developments that are either in the final stages of planning, or under construction.
“It indicates that the industry is well situated for the medium term - 12-24 months - subject to the health of the world economy,” Mr Orton said.
Labour Shortage
The on-going emigration of skilled people from all sectors of the building industry, is exacerbated by the disparity in wages between Fiji and its neighbours, Mr Orton said.
“This will lead wages,” he said.
“In the short term, it has led to an increase in Fijian businesses sourcing labour from other countries, such as the Philippines and Bangladesh.
“Ideally, the technical and university institutions will improve the quality of their courses, to ensure they are on a par with overseas institutions.
“This will enable local students to obtain Degrees without going overseas to study, and then remaining there, to Fiji’s detriment.
“Remittances from overseas are a poor substitute for a highly qualified local workforce that is paid on parity with our regional neighbours.” to increased