Developers are looking to consolidate and avoiding any risk enterprises, such as large scale projects like condominium blocks.

AS the economic downturn bites, local construction companies are drawing in their horns. But building workers’ jobs are safe – for the moment.

Yangon building firms are avoiding high-risk, high-return developments and choosing project locations with greater care. But there seems to be enough construction work in the private detached house market – still buoyant because of falling materials prices – to keep the labour force employed, sources say.

U Aung Tun, managing director of MPT Construction, said the effect of the crisis so far had not seriously affected their business and they were not cutting jobs.

“Currently there is no labour reduction in my business. New job orders are still coming in, but we’re choosing the location carefully in order to avoid making a bad investment,” he said.

MPT invests both in small apartments and condos, providing a balance that helps keep the company afloat in hard times, said U Aung Tun. In the current situation the demand was for small apartments rather than luxury condos, and market trends favoured dealing in completed properties over buying on the deposit system.

“This is a hard time for some small developers, who rotate the money they get from selling on deposit, and for builders who only invest in the high-end condo market,” he said.

Based on the overall property market, demand had decreased about 50 percent in the past month or so, he added.

Another developer in the market also said that although overhead costs had fallen about 2-5pc, there was no plan to decrease labour costs or quantity.

“The situation is not bad enough to reduce our labour. But we are avoiding projects where we have to invest a lot up front. In the current situation, most of the business we accept is in detached house construction with the Plinth Area Estimate (PAE) system.

“This is a nice time for home-owners to finish their houses because of the downturn in materials prices.”

The PAE system permits the calculation of building costs based on square footage.

He said developers were watching the situation closely and were reluctant to invest in elevator buildings or condominiums.

U Tin Tun, manager of Yadanar Myaing Construction also said they would not be cutting jobs yet. “Planned projects are rotating at the normal rate, and money is also entering the market from buyers putting down deposits. At the same time, materials prices are down. So our business is not seriously affected yet,” he said.

He said, however, that in the property market overall, demand had fallen by 50pc in the last three weeks.

“Although demand remains strong for downtown apartments, the market elsewhere, like Kyeemyin-daing, is stagnant. So we take care when choosing the location for our next project,” he said.

He said most current projects are detached houses with the PAE system and room-type apartments in the downtown area.