Influencing Factors Identification And Trend Forecast Of Labor Cost Changein Construction Projects

Since Reform and Opening, China’s economy developed rapidly, large numbers ofconstruction projects began to appear and promote the booming of construction industry.As a typical labor-intensive industry, the construction industry has attracted manyruralsurplus labors. The large numbers of cheap labor force actuallystrongly support theconstruction and Chinese economy. However, the advantage of cheaper and more laborforce began to changein recent years. Labor cost increases year by year, somelabor-intensive industries come across labor shortage. With the increase of labor wagesand labor shortage, construction companies began to realize the advantages of cheaplabor has been weakened. The proportion of labor costs in direct costs increased year byyear, also the overall cost rises a lot. Nevertheless, rise of labor wages didn’t bringsufficient labor resources, insufficient of workers still exists. To be able to help theconstruction companies to solve a series of problems caused by rising labor costs. Theauthor started from figuring out the influencing factors of change of labor cost. Thoughquantitative analysis and mathematic models, the author wants to precisely figure outfactors cause changes in labor costs in order to raise reasonable suggestions for presentproblem.Firstly, taking Chongqing city as an example, the author did a comprehensivesurvey of the status of the construction labor costs. Then the author summarized factorscausing changes in labor cost.In order to clarify the impact of these factors on labor costs, the paper quantifiedfactor indexes, established a vector autoregression model (VAR) to do empiricalanalysis. With valid factors, the paper predicted and analyzed the future trend of laborcosts, and put forward reasonable solutions for construction companies.The author used a combination of qualitative and quantitative research methods,the practice and theory and clarify the relationship between the objective variant andinfluencing factors. Hopefully the paper can help to offer effective solutions for presentproblems.