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What does it means? We don't do it now because labour's dear and materials are cheap

"Labour's dear" means that the physical work costs too much.

Nosotoros no lo hacemos ahora porque trabaja cuesta demasiado.

It means that labor is costly. Technically, the word "labour's" is incorrect as written. I am not sure if it is common to write like this in British English, but in American English "labour's" would denote possession. The meaning of the word "labour's" used in the sentence is "labour is", so you can see that there is no possession taking place.