Why It Matters

Building on productivity push

To raise productivity in construction, a sector that is struggling with profits and efficiency, the Building and Construction Authority said last week that it will announce public projects that require higher levels of prefabrication ahead of time.

The longer runway is meant to help firms prepare themselves for using methods like prefabricated prefinished volumetric construction (PPVC), where entire rooms are built off-site and topped up with finishings like a lick of paint.

These methods are better as they are less labour-intensive and produce products that are higher in quality, with less wastage of material.

But the technology is relatively new in Singapore, and many firms are reluctant to be the first-mover in adopting the methods while they are still costly.

So it is a good move to give anxious firms - which are already taking a beating after the dip in demand for private projects - a heads-up, so they can be encouraged and nudged towards taking on the volume in the pipeline.

Last month, the Housing Board said a third of its new homes would be built using the PPVC method. In the meantime, the authorities are bringing forward a total of $1.4 billion in public projects over the next two years to help small and medium-sized firms.

But prefabrication often requires repetitive designs in large quantities to justify and bring down the cost, which means that bigger firms are more predisposed to using such methods, compared with smaller firms that have a smaller budget. Experts have pointed out that this could lead to market consolidation in the future.

So while it is heartening that the authorities are underscoring the importance of raising productivity, it is also important to keep an eye out for the smaller firms in the short run.

All these will help to steer the sector towards more methods to increase productivity. It may be a painful road ahead for those in the industry, but the measures will help to pave the way for a smoother journey.

A version of this article appeared in the print edition of The Straits Times on October 09, 2017, with the headline 'Building on productivity push'. Print Edition | Subscribe