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Construction Industry Experiencing Labor Shortage

February 23, 2007

Young women and late sleepers may have been among the first to notice the problem – a labor shortage has reduced the throngs of catcallers and jackhammer operators in Central Valley construction sites. Insiders blame the absence on the sucking action of a construction boom and astronomical construction growth rates on both coasts.

Immigration laws and trends may have exacerbated the problem.About 60% of construction workers in the country are Nicaraguan, the chamber figures, a number that is dropping quickly.

“It’s not like it was 10 years ago. There are other places for migrant workers to go, like Spain,” Costa Rica Construction Chamber President Jaime Molina said.

Molina believes the government needs to overhaul its immigration policies to entice foreign construction workers not only to come to work here, but to stay until the job is done.

“We need to be able to bring people into the country for projects of up to two or three years,” he said. “Sending them home (to comply with visa regulations) partway through a project is unacceptable.”

Besides visa issues, better pay at coastal sites could be draining labor from the Central Valley. Rodrigo Azofeifa, chief engineer in charge of the condominium project Torres de la Colina in the western San José suburb of Escazú, said workers drawn by perks such as expense-paid travel and meals leave the Central Valley for the coasts.His response has been to slough the problem onto subcontractors and let them deal with the shortage, and to use construction techniques and materials that require fewer workers.

“It makes the cost go up, but you need fewer people,” he said.

Some in the construction chamber fear that a housing boom in Nicaragua may have triggered a shortage here. The chamber’s finance director Miguel Tapia attributed a 30% rise in construction wages this year to increased demand for labor due in part to Nicaraguan growth.

The tremendous housing boom on Costa Rica’s coasts is led by the Pacific province of Puntarenas, followed by the Caribbean province of Limón and the northwestern province of Guanacaste, according to the chamber (see separate story). That growth has largely fueled the 9.1 % rise in the number of workers the construction industry employees over last year.According to the chamber’s statistics, about 125,000 people, 7% of Costa Rica’s workforce, work in construction.

But at least one developer in Guanacaste, well known as a magnet for North Americans and some Europeans looking for seaside condos, has not felt the crunch.

Francisco Alvarado, president of Grupo Mapache, is at the helm of a company with a 20-year history of building colossal condominium projects and other ambitious housing developments throughout the Pacific region and Central Valley.

“I think there is no problem in Guanacaste, there is no shortage of labor,” he said. He said “talk of the possibility of a labor shortage” because of a Nicaraguan construction boom last year was a smoke-and-mirrors effect that proved untrue.

“Even though there might be more construction in Nicaragua, the wages paid there are always lower than those paid in Costa Rica, so people will always come here to work,” he said.

He also downplayed the extent of a Nicaraguan construction boom. The northern neighbor’s new Sandinista leadership and its association with leftists, socialists and Cuba have kept investors focused on Costa Rica, he said.

“Even though the new government has indicated it would be open to free-trade agreements and protect private property, investors are waiting to see what will happen,” he said. “People who are thinking of investing in Nicaragua think again because of the possibility of (President Daniel Ortega’s) connection with the South American socialist presidents like (Venezuela’s) Hugo Chávez, (Bolivia’s) Evo (Morales) and (Cuba’s) Fidel (Castro).”

He is cautious, however, about predicting continued stability.

“The rise in foreign investment here will always provide jobs for people. If there were a sharp rise in construction projects there could be a problem here, but I don’t see a problem in the short term,” he said.

 

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