Despite all of the restrictions, limitations and difficulties imposed by the pandemic on the industry (difficulty in obtaining imported materials, the need to create shifts to reduce the number of people working simultaneously, adaptation of building sites’ social facilities, and extra attention with employee hygiene, among others), the sector has demonstrated an impressive level of resilience.
According to AICCOPN, investment in the construction sector saw growth of 4.8% in a year in which total investment fell by 4.95% year-on-year (data from February 2021). It was the only branch of activity that showed growth (3.3%) compared to the previous year, even in the face of the current uncertainty.
There was a slight contraction in domestic cement consumption in Portugal during January 2021 compared to the same period in the previous year (-2.8%). December 2020, however, saw growth of 10.6% (accumulated year-on-year variation).
All the above indicators suggest that the interest from investors/real estate developers in the Portuguese market continues to exist and that the sector had maintained its dynamism.
The new construction cost index also is still positive, mainly driven by an increase in labour costs. This trend has been consistent in recent years, primarily caused by the exodus of skilled labour abroad in the post-crisis period of 2008.
Demand in the construction sector has increased, driven by foreign investment in the Portuguese real estate market. However, the shortage of skilled labour in this sector has led to more significant difficulties in meeting demand, and consequently, construction costs have increased.
Therefore, it is urgent to invest in the professionalisation of sector employees, boosting their recognition, as they traditionally earn lower salaries, and in many cases, lack decent working conditions. Such investment becomes essential to attract new specialised labour, which at this moment, is often seeking better working and salary conditions in other sectors or countries.
The use of poorly-skilled labour with poor working conditions is also traditionally a fundamental problem in the construction sector and, in many cases, causes unfair competition in the various branches of the industry. All too often, safety and quality are compromised for the sake of price, which is ethically reprehensible, at the very least.
In my opinion, it is essential that everyone operating in the real estate sector, from across the construction process, including real estate appraisers, consultants, investors/developers, planners and others, be realistic in the assumptions made in each project so that the analysis and planning of the same may be as definitive as possible and thus contribute to the professionalisation of the sector. As real estate appraisers, let’s stop fixating on results while sacrificing the variables, thereby compromising the entire sector’s credibility.