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  • Writer's pictureAdam German

Shimizu Construction president on the 2024 problem

Shimizu Construction's President, Kazuyuki Inoue, addressed the looming 2024-problem in a January 17th interview with the Nikkei Shimbun


Starting in April 2024, a legal cap on overtime will affect the construction industry, drivers, medical personnel nationwide as well as sugar plantation workers in Okinawa and Kagoshima prefectures.


Kazuyuki Inoue courtesy of Shimizu Corporation website


Focusing on construction, this law paired with an impending labor shortage, escalating labor costs appear inevitable. The surge in construction material prices raises concerns about the feasibility of cost transfers to clients and consumers, prompting a reassessment of project schedules.


Basically if you were planning on building a home or building this year, the 2024-problem will affect your budgeting and timelines if they haven’t already.


To comply with the 720-hour annual overtime limit, Inoue outlines strategies, such as adopting a 4-week, 8-day off system in 70% of workplaces. 


Rotations and increased temporary hires aim to reduce individual workloads. However, this adjustment may extend project timelines, potentially leading to project abandonment.


The April overtime limits also include drivers, raising further questions about whether increased costs will be transferred to consumers. Transportation expenses for materials like ready-mix concrete are expected to rise.


The construction industry grapples with a shortage of skilled labor and an aging workforce. Inoue suggests resolving this by raising wages, improving working conditions, and attracting more individuals to become craftsmen. 


Negotiations aim to have clients accept the resulting increased construction costs as a result.


In urban redevelopment projects, the impact of rising construction costs is substantial. The prolonged construction periods for tall buildings and sharp increases in material prices may disrupt the balance. While subsidies from governments and local authorities mitigate some challenges, a project review may become necessary.


Recognizing the limitations of relying solely on technology and machinery to control costs, Inoue emphasizes cross-industry collaboration for productivity enhancement. Transforming the entire production process, especially during the planning stage, becomes crucial. 


With various companies involved in construction, initiatives beyond the industry, such as data collaboration between design and construction firms, are deemed necessary for this transformative shift.


Source: 

Nikkei Shimbun (Japanese only; paywalled) 

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