Taking construction to a new level

The Building and Construction Authority's (BCA) new requirements, on the use of labour-efficient construction methods and building design, are the latest move in serious efforts to ramp up productivity in a sector that has contributed to weighing down Singapore's overall record. Also, construction firms will soon need to have a minimum percentage of higher-skilled workers on their payrolls. The State's aim is to transform construction into an efficient and more integrated industry in which forward-looking firms and a higher-skilled workforce set the benchmarks.

Official goals are buttressed by concrete support, such as the BCA's Construction Productivity and Capability Fund, which seeks to incentivise development of the workforce, adoption of technology and enhancement of capability. Yet the industry lags behind.

The picture is not completely bleak. There is the issue of whether Singapore's overall targets themselves - 2 to 3 per cent in annual productivity growth over a decade - adopted in early 2010, were too ambitious to begin with. Then, it is necessary to adopt different measures of productivity to reflect accurately how each sector is performing. On that count, the industry has been making progress, going by square metres constructed per man day. Even so, however, construction is a recalcitrant under-achiever as the country approaches the half-way mark of its economic restructuring drive.

Labour productivity growth averaged a miserly 0.1 per cent from 2011 to the second quarter this year, and only 0.4 per cent if construction is excluded. Clearly, the situation is untenable, and the sector is cause for concern irrespective of arguments about productivity levels and indicators.

The key, and perennial, issue is that construction work is not attractive to Singaporeans. This aversion causes heavy dependence on abundant foreign labour. While administrative moves to enhance the skills profile of the foreign labour force do oblige the industry to upgrade itself, the easy availability of that labour is an impediment to speedy and lasting change. Yet, there are best practices in other countries that could be imported, even if only partially, to improve the situation. A study of Australian construction productivity, for example, cited the following as industry strengths: strong competition at all levels in the industry; flexible management structures and work organisation; a strong skill and technological base; strong international linkages; and flexible industry regulation.

Singapore's construction industry must look beyond its veritable army of cheap foreign labour, and see itself as a sector that is fully capable of arising above the unenviable label of a productivity laggard.