Workers are seen at a construction site in Tokyo. Photo: REUTERS file
business

Labor-short construction industry investing in AI and robots

19 Comments
By Daniel Leussink and Izumi Nakagawa

As Japan's construction firms are squeezed by the tightest labor market since the 1970s and a rapidly aging population, they are pouring investment into technology - and providing unexpected support to an economy reeling from the bitter U.S.-China trade war.

The industry sees artificial intelligence and robots - which can that scurry around building sites day and night, preparing equipment and moving materials for the next day's construction - as a way to future-proof and close the labor gap.

But a side effect is that one of Japan's least-productive sectors is bolstering capital expenditure even as the world's third-largest economy flirts with recession amid a global growth slowdown.

Construction company Shimizu Corp, which spent about 3 billion yen for robots over three years, is a case in point.

Equipped with state-of-the-art AI, cameras and sensors, the machines handle everything from transporting building materials and welding steel to installing ceilings.

For now, Shimizu estimates the labor savings from the robots in its construction work to be 1.1%, far off the land ministry's goal of a 20% productivity boost for the sector by the middle of next decade.

But the company hopes to eventually automate three-fourths of its work as it expands the range of tasks robots perform, said Masahiro Indo, general manager of its construction technology division.

"When it's hot, workers need to take breaks and drink water. Robots don't need that as they don't get tired, so that's good," he said. "Once the robots become smarter, we are looking to increase the range of work."

MORE PROJECTS

Construction work has blossomed in Japan under Prime Minister Shinzo Abe's "Abenomics" stimulus and an infrastructure boom ahead of the 2020 Tokyo Olympic Games.

The government is also spending heavily on disaster relief as the country recovers from a slew of typhoons and flooding.

Capital expenditure in the sector rose 7.7% in the April-June quarter - far above the 1.9% gain for all industries after a 15.3% jump in the previous quarter, government data showed.

That has moderated the pain of a 6.9% fall in manufacturers' spending.

Construction firms plan to boost research and development spending by 15.5% in the fiscal year ending in March 2020, faster than the previous year's 13.8% gain and 7.7% rise in the year before that.

It was the highest among all sectors, which overall plans to increase such spending by just 3.3%, the Bank of Japan's quarterly "tankan" survey for September showed. (Click here for an interactive graphic of the growth of the construction sectors' R&D spending).

Year-on-year, total capital expenditure in Japan rose for the 10th straight quarter in the April-June period, helping gross domestic product (GDP) expand an annualized 1.3%.

"Construction projects need a long time to complete. That means once investment starts, the impact lasts for a long time," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities. "While the short-term boost could be small, construction investment tends to offer long-term support to the economy."

AGING WORKERS

The pain of a small labour pool is made worse by an aging population. Japanese aged 60 or older now make up about a fourth of the construction industry's skilled workers, while those under 30 are just over a tenth of the total, down from about a fifth in the late 1990s.

That means all companies are fighting for workers as the jobless rate hovers at more than two-decade low of 2.2% and the number of job openings for every applicant is near its highest point in 45 years. (Click here for an interactive graphic of skilled construction sector workers grouped by age).

There were 5.1 million construction workers in Japan as of end-August, a 27% decline from 20 years ago.

Battling such headwinds while enhancing productivity are crucial, particularly for huge infrastructure projects such as overhauling the area around one of the busiest train stations in Tokyo.

The renovation of the Tokyo Metro Ginza Line's station in shopping hub Shibuya, handled by Tokyu Construction Co and other firms is complex and includes moving an entire train platform.

In the past, that involved stopping train operations on weekends and intense training for workers on the project.

Now, a three-dimensional simulation of the process is shared among the workers, allowing them to identify potential problems with construction in advance.

The computer model reduced personnel expenses for that part of the project by about 60%, said Fumihiro Ojima, group leader of the ICT project group in the company's civil engineering division.

"We could do things in the simulation model that are impossible in reality, such as removing a building and looking at it" from another angle, he said.

But such changes also bring challenges, such as requiring older workers to adjust to new technology.

"Workers will need to improve their skills," said Kentaro Arita, senior economist at Mizuho Research Institute. "But that's a high hurdle, and a full-fledged shift could be stalled if that can't be done."

© Thomson Reuters 2019.

©2019 GPlusMedia Inc.

19 Comments
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its quite a comprehensive report, but, robots take time to make and install, they are also very expensive, and they do break down from time to time. what the report misses out is the alteration to non native workers. if the government relaxed its very restrictive labour and foreign labour laws, the workers will come in droves (hopefully) but no Japan still has closed boarders or the unwillingness to open up its arms to skilled workers from abroad, and what would help is the pay needs to raised.

3 ( +3 / -0 )

But a side effect is that one of Japan's least-productive sectors

I disagree with this statement.

But the reason behind the lack of workers is the conditions. If they simply improve conditions and offer benefits on par with other countries, they would see a surge in workers. Construction work has never been a minimum wage job. In Japan it is. Even workers that work for cash in other countries are paid above that.

Right now the industry standard is low pay, no overtime pay yet a huge amount of overtime hours. People don't want to kill themselves in dangerous work that doesn't pay them well.

8 ( +8 / -0 )

No such thing as a labor shortage in Japan. Rather, there's a shortage of jobs paying a living wage. Advertise all these jobs for 5000yen per hour. Miraculously, they'll all be filled within a day!

9 ( +9 / -0 )

For starters, AI robots mobilizing heavy-duty equipment and arranging site settings without doubt decreases the overhead expenditure of manual manpower. Eventually, robotics will overtake the labor force.

-1 ( +1 / -2 )

If you have ever worked on a building site you know interaction between workers, archatitects requires a bag of knowledge. Something a robot would just not understand probably blow something and not in a good way. Yep they can carry stuff, but from what I've experienced the plan is always mouldable. But give it a go. What could go wrong?

2 ( +2 / -0 )

AI = Advanced Intelligence, NOT artificial intelligence

: How of those workers in the picture actually work for or are employed by Shimizu Construction or some other major construction company here?

I would bet less than 1% of any of these sites have workers that are hired by the contracted construction company, and the other 99% are sub-contracted, by a sub-contractor, who hired another sub-contractor to finally find a sub-contractor who is doing the work with hourly paid, PT workers who make less than 10,000 yen per day. BUT all the "sub-contractors" took a piece of the pie for themselves and ALL their hard work in finding a sub-contractor.
1 ( +2 / -1 )

Sorry... How MANY of those workers....

0 ( +0 / -0 )

Source: Article: "firms are squeezed by the tightest labor market since the 1970s and a rapidly aging population, they are pouring investment into technology - and providing unexpected support to an economy reeling from the bitter U.S.-China trade war."

Excuse after excuse. Instead the wealthy would rather pay a machine that is at best an even more larger risk since the human factor is removed from the equation. The so-called tight labor market is attributed by 2 key factors missing in the article that has nothing to do with shortage of manpower but rather 1 lack of those willing to work for low low wages at back breaking paces. 2. unused labor pool as clearly just in October alone crime reports all were from those 21-50 unemployed labor skill force. hmmm. and the foreign workers already in country legally but not desired by many Japanese companies even for miniscule labor extensive jobs. That is the main problem not technology.

0 ( +0 / -0 )

There is no labour shortage, there are many Japanese people who really wants to work but it is the talk only Japanese that gets job. Pay correctly the real people and , truly there is no shortage of labour but poor minded Japanese workers who takes hard working honest people's credit.

0 ( +0 / -0 )

Take notes, America!

This is how its businesses should invest & innovate instead of pushing amnesty and subsidy for low-tech and “cheap” labor.

-1 ( +1 / -2 )

This won't fair well for the working people with the company aim of replacing them with robots which will only work when a government pays citizens a living wage paid for by the taxes applied to robots.

0 ( +0 / -0 )

Can anyone provide the data showing there is a surplus of workers? I don't doubt you, I'm just interested

1 ( +1 / -0 )

Take notes, America!

This is how its businesses should invest & innovate instead of pushing amnesty and subsidy for low-tech and “cheap” labor.

Brilliantly argued, Redsuns. Japan does not need to follow what The West is doing, importing very cheap labor. Robots can do it. I am puzzled why some people are against this technology, that will make jobs much easier, like computers already have.

Robots are already working in some hotels and restaurants in Japan as service staff. They are working in hospitals, and as auto-makers. They could work the night shift in conbini's. I look forward to 10-20 years from now, when robots can do most of our jobs and we will only have to work a few hours each week. More time for hobbies, family, and drinking!

-1 ( +0 / -1 )

Just my thoughts but robotics is still a long way off currently for construction work sure manufacturing is well into robotics and robotic seam welders are performing well in construction such as tanks and vessals but they still need to be set up by a qualified welding technician. The future for robotics in construction I believe is 3D printers see link here: https://en.wikipedia.org/wiki/Construction_3D_printing

And humans will always be needed to setup, maintain and remove the robots so workers will need to be trained accordingly. In Japan there are technical high schools that are creating the next generation of workers, after all college is not for everyone.

0 ( +0 / -0 )

More time for hobbies, family, and drinking!

Wow! So naive!

2 ( +2 / -0 )

I have yet to see a robot do anything in Japan. There are so many variables in putting up a building or assemblying scafolding, I just cant see it happening.

1 ( +1 / -0 )

Good !!

-1 ( +0 / -1 )

I love these experts talking about robots in the building industry.

None have ever hammered a nail let alone spent any time on a building site .

Ive spent all my working life on building sites and i can tell you

Yar wont be seeing any robots in the near future getting in the road of men working on a busy building site .

2 ( +2 / -0 )

Robots are already working in some hotels and restaurants in Japan as service staff. They are working in hospitals, and as auto-makers. They could work the night shift in conbini's. I look forward to 10-20 years from now, when robots can do most of our jobs and we will only have to work a few hours each week. More time for hobbies, family, and drinking!

When we can see robots take the place of the politicians, Abe, and a majority of the people who are working in city offices, THEN I will applaud the use of them!

0 ( +0 / -0 )

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