Download - Malaysia Construction Labour Rate
MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
TABLE OF CONTENT
Acknowledgement Page
Introduction Page
1.0 Objective Page
2.0 Definition Of Labour Page
3.0 Definition Of Daily Wage Rates Page
4.0 Sources Of Labour Page
5.0 Classification Of Labour Page
6.0 Types Of Labour Trades Page
7.0 Sub Contract Labour Page
8.0 Analysis On Labour Rate Page
8.1 Analysis Based On Contractors Page
8.2 Analysis Based On Regions Page
8.3 Analysis Based On Years Page
8.0 Factors Influencing The Labour Prices Page
9.0 Effects of labour price Page
10.0 Conclusion Page
References Page
Appendices Page
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
ACKNOWLEDGEMENT
Assalamualaikum,
A thousand thanks would not enough to show my appreciation to thus who helping me
out to complete this report. Thus, I would like to show my appreciation with praise to the
almighty god Allah S.W.T.
Alhamdulillah,
I’d finish this report to meet the dateline as to complete my practical training. Million of
thanks to the precious company which is AAJ ASSOCIATES SDN. BHD. owned by Sr. Arrifin
Bin Omar who give me opportunity to doing my practical training.
Million of thanks to all my workmates especially En.Syamsul who guide and giving me
advise about labour price that is very useful knowledge.
Also to Mr. Simon Khoo from Usahasama BMSSB who explain to me how contractor
pricing their labour.
Not least, my lecturer En. Muhamad who giving advice and check my poor paper work
and willing to comment even I barely miss the dateline.
This report is referred from past year practical student, even though I tried to keep
originality of my work but it is hard to do since the base of the report almost are the same. But
100% of originality was granted as I add my own data and in my explanation.
As to avoid any plagiarism accusation, I’d put some In-Text-Citation but the original text
may be not exactly from the sources since as I said I tried to keep 100% of originality of my
own. Credit given to writer who I copied their text in reference, but several maybe not stated
because half of my sources erased along with my hard disk formatted.
THANK YOU
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
INTRODUCTION
Malaysian economy generated by construction sector directly and indirectly, where it has
lends strength and capability to a host of economic sectors, whilst supporting the social
development of the country through the provision of basic infrastructure. (Asiaconst,2009)
A construction project depends on project resources which are capital, labor, plant
and materials. Among the most important source is the source of labour. Thus, to grant a quality
construction, quality human resources must be developed. Quality human resources and highly
knowledgeable and will continue to lead the country for excellence in the future. Along with the
skills and abilities innovative, national employment growth is expected to be maintained with
improve productivity and competitiveness of Malaysia continues to carry forward.
Malaysia has a problem to fulfill the requirement of demand of labour because the
population of Malaysia not interested in construction where the payout are not meet the level of
difficulties. Therefore, the government of Malaysia had to import foreign labour from other
country to fulfill the labour’s demand.
Local labour which is labour that comes from our own country and has the citizenship as
Malaysian. Usually local labours work as a skilled workers because of their skill and areas of
expertise. While foreign labour is the imported labour usually come from Indonesia, Myanmar,
India, Bangladesh and such. They fulfill the un-skilled workers position and they payout much
lower than local labour but this is not including the cost to import them.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
DEFINITION OF LABOUR
According to Oxford Dictionary, Labour is referred to the people who work for food or
wages while skilled labour is the person who gained expertise on certain area from experience
or professional training. Semi skilled labour is person who has expertise on certain area but not
skillful as skilled labour.
Wikipedia defined labour as the person who sold labour power and the production
process in which it is applied by an employer in exchange for the wage price. As for Skilled
labour, they are generally more trained, higher paid, and have more responsibilities than
unskilled workers. Wikipedia did not mention about semi skilled labour but semi skilled workers
is an assistant to artisan (skilled worker) This three classification will be described in
CLASSIFICATION OF LABOUR.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
DEFINITION OF DAILY WAGE RATES (LABOUR RATE)
It is defined as the basic cash wage per day (Basic cost to contractor) payable by
building or civil engineering contractor to operative. The daily wage is for work done in a day of
eight (8) working hours from 8.00 a.m. to 5.00 p.m, with one (1) hour lunch time in between. It
is the cash wage payable to operative before any deduction for levy charges, accommodation,
insurance, SOCSO, medical and transport charges. (CIDB, 2010)
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
SOURCES OF LABOUR
There is two sources of labour which is:
Local Labour
Foreign Labour
Local labour can be defined as workers who are recruited near a factory, and are not
brought there from a distance. For this situation local labour is Malaysia Citizen, most of the
local labour is not being general worker because usually local labour who stay in construction
has high experience and certain skill (Wikipedia,2008)
While foreign labour can be defined as any people working outside of their home country.
The term can also be used to describe someone who migrates within a country, possibly their
own, in order to pursue opportunity of work. (Wikipedia,2008) In Malaysia, foreign labour comes
from Indonesia, Nepal, India, Bangladesh Myanmar and others country which lack with job
opportunity.
Malaysian construction industry has been generated by foreign labour because of shortage
in local labour. Local labour shortage cause by the high wages demand and low future
expectation from this manpower sector.
In 2001, Migrant labor makes up approximately 20 percent of the Malaysian workforce. The
country currently has between 1.7 million to two million foreign workers, of whom 770,000 are
legal. (United States Department of Labor,2002)
In 2010, there were 2.01 million foreign workers in the country and that the number would be
gradually reduced by half by 2015. (NST,2008)
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
CLASSIFICATION OF LABOUR
For construction industry, labour is individual who involves in construction work and do a
site works based on their skilled and expertise. The function of labour in construction works is to
done properly from the beginning until the constructions of the project is complete.
These are 3 categories of labour in construction:
Skilled labour
Semiskilled labour
Unskilled labour
Skilled Labour
Skilled labour is a worker that has their expertise and skill in a particular work, where
they are only do the specific work. Normally, they usually have the high level of knowledge
about the work scope. (Wikipedia,2009) The example of skilled labour stated as below
schedule.
NO. TRADES
1 Bricklayer
2 Glazier
3 Plumber
4 Roofer
5 Drainlayer
6 Painter
7 Welder
8 Concreter
9 Bar Bender
10 Carpenter
11 Pavior
12 Masonry
13 Tile fixer
14 Plasterer
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
Semi-Skilled Labours
Semi-skilled labours are workers that have less expertise and skill in certain works,
compared to the skilled labor. They usually an artisan/skilled labour assistant. Their work are
not need high skilled as skilled labour.
Unskilled labours
Unskilled labour is the workers that not need any special knowledge and expertise to
perform their job. They usually do the general works. They also assist the particular works such
as mixing concrete, cleaning the site and etc. (Wikipedia,2009)
In construction work, labour has important duty to complete and performed the construction
progress on site, their will categorized by their skilled and trades. Trade is a labour that has
skilled in a scope of work and they will concentrates on their own scope of work, so the
maintenance can be done easily.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
TYPES OF LABOUR TRADES
A) CONCRETER
The concreter is responsible in ensuring the concrete mixing for a building is
following the standard specification and they also responsible to ensure the
strength of the building the concrete test done.
B) BRICKLAYER
The bricklayer is expert in arrangement and bonding of bricks for the building
wall. They are expert in Flemish bond, English bond and stretcher bond.
Bricklayers build walls, chimneys and other structures from masonry units such
as brick, block, glass block or stone.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
C) DRAIN LAYER
Drain layers are responsible for sewerage, sump, manhole and other things
concerning the sewerage system. It must be done perfectly to ensure that the
sewerage system in the building does not be in function when it is used.
The drain layer must be skillful in deciding the pitch for the drains and its depth.
D) MASONRY
Masonry is a labour concerning stonework such as stonewalls sewers and
others. They must ensure that the work done is neat and stable.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
Mason need the skilled to arrange all stone and also they must make sure any
shape for prepare exactly suitable for the building and client requirement.
E) JOINER
The joiner is involve in making the dovetail or wedge-shaped joint interlocking
two pieces of wood and making the cabinet, shelter and engraving.
F) CARPENTER
Carpenters in the construction industry are responsible for works concerning
woodwork such as window frame, installation of formwork, doorframe and others.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
G) PAINTER
This trade involved in paint work to external and internal surfaces like wall,
ceiling, frame, windows, doors and etc.Painter not just having the skill of painting
but also the knowledge of it. Painters first prepare the surface to be covered, so
that the paint will adhere properly. This may require removing the old coat of
paint by stripping, sanding, wire brushing, or water and abrasive blasting.
H) BAR BENDER
The steel bar bender are responsible for work involving steel and reinforcement
such as joists and fixing. These work require steel bar bender to ensure the work
are done according to the specification. This is very important trade because it
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
involved the structure which will determined the strength and stability of the
building.
I) ROOFER
Roofer is responsible to arrange the roof tiles properly and making the strong
roof trusses, this is to make sure no leakage on the building.
J) PAVIOR
Pavior is responsible in installing the floor or wall tiles to internal or external of
the building following the client and drawing requirement.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
K) PLASTERER
Plasterers are skilled labours whose work to apply plaster to interior wall, column,
beam, and celings, to form fire-resistant and relatively soundproof surfaces.
Plastering works usually interior and exterior works.
L) WELDER
Welder is involve in steel work where they will heat the steel until molten and
fused or soft enough to hammer or pressed together, the welder must wear
goggles for eye’s safety. They will use electrical power to heat the steel and tie
the reinforcement bar.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
ANALYSIS ON LABOUR RATE
It is necessary every contract to fill with the labour prices as to prepare when there is a variance
of works. Thus, contractors usually enter the amount much higher than the real payout.
To make a comparison I choose 10 differences sources from several contractor and sub-
contractor range between 2007 to 2009 project from 6 regions which is Selangor, Johor, Perak,
Negeri Sembilan, Penang and Kedah (Project Location).
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
Based on Contractor
Unskilled Labour
Masonry
Carpenter
Concretor
Painter
Plasterer
Brick Layer
Drain Layer
Welder
Fitter
Plumber
0.00 20.00 40.00 60.00 80.00 100.00 120.00
Pro-ServGeo StreamCentral WinnersSeleksi BinaUsahasama BMSSBPKNS INFRATeras Khidmat NiagaIjhraaTuah Mahir
Figure 1: Labour Rate Based on Contractor
Chart above contain 12 difference trades from 9 different contractor and 6 different
region and of course it is on 3 years range which is 2007-2009.
The lowest rate in average and all others trades is from Pro-Serv which priced on 2007
with average RM58.64 while the highest is Teras Khidmat Niaga with RM95.45 which priced on
2009.
Tuah Mahir and Usahasama BMSSB both has the highest rate of unskilled worker which
is RM55.00 while Teras Khidmat Niaga paired with Usahasama BMSSB in skilled worker
highest rate for Painter, Plasterer, Welder, and plumber which is RM100.00.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
Based on Region
Unskille
d Labour
Masonry
Carpen
ter
Concretor
Painter
Plaster
er
Brick L
ayer
Drain La
yer
Weld
erFitt
er
Plumber
Region Ave
rage
0.00
20.00
40.00
60.00
80.00
100.00
120.00
SelangorPerakNegeri SembilanLabour Average
Figure 2: Labour Rate For 3 Difference Regions
Chart above shows the distribution of labour rate between three difference region which
is Selangor, Perak, and Negeri Sembilan. This three labour rate, priced on 2009 from 3
difference contractor which is Tuah Mahir Sdn. Bhd will be known as TM later (Selangor), Teras
Khidmat Niaga will be known as TKN later (Negeri Sembilan), and Ijhraa Sdn. Bhd. Will be
known as ISB later (Perak) .
From the chart we can derived that unskilled labour for this three is not much difference
with RM51.67 as for the average. The highest rate is Selangor with RM55.00.
There is no pattern to the differences in rate between these three regions, as for
example Drain Layer rate. TM price is RM70.00, TKN RM100.00 and ISB RM85.00. While for
fitter TM price is RM70.00, ISB RM85.00 and TKN RM100. The changes in price not moving
into some direction due to different factors are taken into account when the rate is priced.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
If we not taking into account for general labour we can see the mode of the skilled labour
price is about RM70.00 for TM, RM85.00 for ISB and RM100.00 for TKN.
Negeri Sembilan rate are the highest with RM95.45 for all labour rate in average
compare to Perak (RM77.27) and Selangor (RM69.09)
BASED ON YEAR
Unskille
d Labour
Masonry
Carpen
ter
Concretor
Painter
Plaster
er
Brick L
ayer
Drain La
yer
Weld
erFitt
er
Plumber
Year
Averag
e0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
20092010Average
Figure 3: Graph Based on Year of Project
Graph above shows the rate of labour for Selangor in 2009 and 2010, 2009 rate taken
from Seleksi Bina Sdn. Bhd. While 2010 is from JB Consult.
For 2009 the average rate is RM69.55 and 2010 is RM71.82 increased in 3.26%, this
increase is not considered as high since the average for this two years is RM70.68. 1.63%
higher than 2009 and 1.62% lower than 2010.
The rate is in fluctuation and not stable, we can conclude that since the brick layer drop
RM10.00 from RM70.00 to RM60.00 while the plasterer increase by RM10.00 from RM70.00 to
RM80.00.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
Although its only one year gap and project location is from the same state the difference
are so obvious. This is because it is has been price by a different contractor who considering
different factors when pricing the labour rate. The reason will be discussed in the next section.
FACTORS INFLUENCING THE LABOUR PRICES
Labour rate will change along with time. From analysis before we can see difference
contractor will have several differences between their rates. This is due to below factors:
(i) Location
Location is one of the factors that influence the labour price. For the place with a smaller
amount of infrastructure facilities, the demand and supply for labour are less needed compared
to the urban area. Rural area also has low living cost, so labour has low expectation on wages.
Thus, it makes the labour price for rural area lower than urban area.
(ii) High-risk project
The risky project will influence the price of labour. It is because the labours need to face the
high-risk situation on site. For the risk taken, the insurance need to cover the workers and high
skill needed to handle a risky situation, as not many labour is willing to take a big risk.
(iii) Competition among the contractors
There are many contractor companies in our construction industry. It is divided to a certain
level or class of contractors, followed by the reputation and experience of the contractors. For
the tender competition, contractors will tackle the client by offering them a lower rate for labours.
There is why the competition among the contractors also is the one of the factors towards the
labour rate.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
(iv) Labours market
Local labour cant fulfill domestic demands thus government allow foreign labour to be
imported to work as labour. In some situation foreign labour wage is much lower than the local
labours but their imported fees has being a big issued, thus many contractor use illegal foreign
worker to cut their wages expenses.
(v) National Economic State
A firm and stabile economic state will causes the growth of construction industry in our
country. Therefore there will be a lot of construction projects running in our country and as well
as the demands for construction labors increases. This demand of labours will increases the
chances for local people to work in the construction industry, as well as increase the rate. That
is why the economic growth and stability is very important in helping the construction industry.
(vi) Size of projects
Sizes of projects also influence the labour price. For example, in multimillion projects the
rate of labour usually expensive than smaller project depends on the difficulty of the projects as
contractor want to avoid any losses if there is variance of works.
(vii) Government policy
Malaysia Government by the Ministry of Human Resource has stated that the labour rate for
the local labour must be higher than the foreign labors. The purpose of the policy is to attract
our local people to involve with the construction sectors. The policy also wants the local labours
to get the specialty. Because of this, there will be a different rate in the labour price.
(viii) Completion period
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
The completion period of the project will also influenced influctuation of labour rates. For
those project which the client want to complete in short period of time, the rates of labour will be
increased. It is because sometimes the labour will do extra work or overtime which require a
payment.
They have used all the energy to complete the work on times specified. Beside that, they
have to work in night that is very risky and they are exposed with an accident. At least, the
increasing of their rates will balance with their work. All these factors are considered to
determine their rates.
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
EFFECTS IN LABOUR PRICE CHANGE
1. Increasing and decreasing the cost of building construction.
o Labour rate will directly effecting the cost of the construction since labour is one
from construction resource. Higher labour rate will increase the cost to carry out
work.
2. Decrease the intake of the foreign labour
o A higher fee was a big factor to the foreign labour to take place in Malaysian
construction industry. They get lower fee if they work in their own country but
compared to local labour, foreign payout is much lower. This is one government
strategy to attract local labour.
3. Actuate the migration of labour
o The rate in urban area much higher than rural area. Thus labour from rural area
will seek an opportunity to migrate to the city as to get a better payout.
4. Increasing and decreasing in the labour demand
o High rate of labour price usually due to high demand of labour which
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MARA University of TechnologyDepartment of Quantity SurveyingFaculty of Architecture Planning and Surveying REPORT B: Labour Rate
10.0 CONCLUSION
REFRERENCES
http://en.wikipedia.org/wiki/Labour
http://en.wikipedia.org/wiki/Skilled_worker
Oxford English Dictionary, Third Edition, 1993
http://www.cidb.gov.my/v6/?q=en/information/695
www.asiaconst.com/past_conference/conference/15th/6 Malaysia .pdf
image from http://www.google.com.my
United States Department of Labor, Cornell University ILR School
http://digitalcommons.ilr.cornell.edu
www.nst.com.my
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