Construction sector likely to ramp up productivity this year

SINGAPORE — While the construction sector has been a laggard in the Republic’s productivity drive, there should be a turnaround in the situation this year as a result of the measures introduced in the Budget, particularly at a time when the industry is at its busiest, the official representative for the sector said yesterday.

Between S$31 billion and S$38 billion worth of contracts are expected to be awarded this year, with the majority from the public sector, data from the Building and Construction Authority (BCA) showed. This compares with the record S$35.8 billion worth of contracts awarded last year and S$30.8 billion in 2012.

With even more billion-dollar contracts on the table, contractors are likely to be more inspired to take steps to increase productivity.

“I would say this is a good year for everybody in the construction industry. This is a good time to increase productivity because when there are enough projects for everyone, they will be thinking about ways to reduce costs,” said Dr Ho Ngok Yong, President of the Singapore Contractors Association Limited (SCAL), on the sidelines of a Budget dialogue for its members.

The slew of initiatives introduced during this year’s Budget will go a long way in helping the industry become more productive, he said.

For example, the mandatory use of productive technology (for selected Government Land Sales tenders) beginning from the design and planning stage will help parties along the construction supply chain reduce reliance on manual labour, Dr Ho said. Such technology includes prefabricated bathroom units.

In addition, the Government’s move to encourage the hiring of higher-skilled workers has also been welcomed, as that will improve the industry’s workforce and drive productivity, he said.

Moves include extending the maximum employment period for such workers from 18 years to 22 years and allowing workers with basic skills, who earn at least S$1,600 a month and have worked in Singapore for a minimum of six years, to be upgraded automatically to higher-skilled status.

Besides measures specifically designed for the construction sector, contractors can also benefit from other schemes such as the Productivity and Innovation Credit (PIC).

“Many in the construction industry have already used (initiatives) such as the PIC scheme (to) buy equipment such as cranes and concrete pumps. These are relevant to the construction industry as well and I believe many can benefit from that,” said Dr Ho.

During the Budget, the Government decided to extend the PIC scheme by three years to 2018.

Omega Construction and Engineering is one company that lauded the extension, although it added that it hoped to see a more “exhaustive” list of equipment qualifying for the scheme, saying that many specialised tools are not included, although companies may still get approval on a case-by-case basis.

“The whole industry is very big. For instance, we’re a construction company in the process chemical industry. We build process plants, oil farms and tanks, so certain tools that we use are not in the list by the BCA … So, it’ll be good if the sources that the information is adopted from are of a wider scope,” said Project Engineer Teo Jia Jing.