Building downturn leads to mass layoffs

Building downturn leads to mass layoffs

Content image - Phnom Penh Post

About 30 percent of Cambodia's construction workers have lost their jobs as developments delayed, union official says

Photo by:
Tracey Shelton

Camko City construction workers leave the jobsite at the end of a workday late last month.

Laid off

The percentage of Cambodia's construction workers a union official says are out of work as financial crisis hits domestic building sector

Cambodia's construction boom appears to be grinding to a halt in the wake of the global financial crisis, with nearly one-third of the country's construction workers finding themselves out of work, a labor leader said.

Sok Sovandeith, president of the Cambodia National Federation of Building and Wood Workers, said no official figures were available, but his research showed that employment in the sector was down 30 percent.

He blamed the global financial crisis for causing developers to delay

construction, but said the ongoing border dispute with Thailand had also undermined property sales.

"They have stopped building because they cannot sell or rent apartments and therefore have no money for construction at this time," he said.

Some agents and developers have reported sales declines of up to 50 percent this year and have called on the government to ease restrictions on foreigners owning apartments to give the real estate sector a boost.

Chung Savoeun, the chief of construction workers at the Senmonorom City development in Phnom Penh, said he previously managed 68 construction workers but 33 had returned home after work dried up.

"If the construction owner has more work to do, I will bring all of them back," he said.

Nep Teak, 33, from Kampong Cham province, said he managed a 70-strong construction crew in Phnom Penh at the height of the building boom five months ago, but now he only manages five. The rest have gone to their home provinces and were waiting to return if he could find them work.

"I will take back my workers from other provinces to work as construction workers again after everything is better," he said.

Referring to the global financial crisis, he added, " I hope that everything will be solved and that the construction sector will boom again."

Unpaid wages

Chub Chom, 50, the chief of construction workers at Chip Mong Construction Co, said laid off workers from his Phnom Penh construction site still had not received wages owed.

"They were forced to go back home because the construction project was delayed, but they did not get their wages", he said.

"The company owes me around US$2,800, but they have not yet paid me a cent. I can't live without that money, and I am trying to get it back."

The person in charge of wages at Chip Mong, Pich Sopharat, could not be reached for comment, but Sok Sovandeith said he had assured him he would pay wages to the construction chief Chub Chom after the Water Festival and "pay the other construction workers later".

Most laid off workers had been forced to return to their home provinces. Chhim Sophea, 36, said he had struggled to find a job that paid a livable wage after losing his job when the company he worked for delayed construction.

"I stopped working more than three months ago," he said. "I have no job to do so I stay at home and take care of my four children. My wife is working as a garment worker to support my family."

He added he was paid $2.50 per day as a construction worker and was unsure where he could find another well-paying job.

Construction worker Meas Samoun, 50, said he was forced to return to his village after losing his construction job in Phnom Penh.

He said he had worked ten years in the sector but had been unable to save money in that time, leaving him  worried about the future of  his family of seven children.

He was working as an ice-cream seller in Kampot province when he spoke to Prime Location.

The construction sector employed 45,000 to 50,000 workers at its peak, Lao Tip Seiha, director of the Department of Land and Construction, told Prime Location recently. Unskilled workers received $4 per day in wages, skilled workers $150-$250 per month and architects and

engineers $600-$1,200 per month.

Independent economist Sok Sina said the downturn would make it hard for affected workers to support their families and reduced consumption  would have a flow-on effect to economic growth.

He blamed the global financial crisis and its impact on South Korean developers. "There are some Korean projects that are delayed in Cambodia because of the financial crisis, he said. "If these problems are not solved, it will have more and more of an effect on Cambodia's economic growth."

Prime Location has reported that many South Korean developers have suspended any new construction activity. The developments include GS Engineering and Construction's International Finance Complex, BK Global's Pharos Mekong Towers and Daesan Cambodia, which is planning a 45-storey condominium tower overlooking the Tonle Bassac river.