Importance of the Building and Construction Sector
Within 50 years, Singapore made the rapid transformation from an underdeveloped Southeast Asian city state to a modern First World economy and one of the key business hubs of the region. As its economy grew, so did its urban landscape and infrastructure develop to keep pace with the needs of its inhabitants.Through the years, the building and construction sector has benefited immensely from the rapid pace of urban development, with both the public and private sector creating strong demand for their services.
The construction industry is worth around S$36 billion, accounting for 5 per cent of national GDP. It is made up of 12,500 firms and employs 320,000 workers. However, 5 per cent of the large firms contribute half of the total value add of the industry. The remaining are SMEs and there is usually a great disparity in productivity between large and small firms.
Looking forward though, the industry has come to a crossroads precipitated by the current economic restructuring, and will need to find ways to adopt new technologies and innovations to boost productivity and reduce manpower reliance.
Taking the Lead in Raising Productivity
In Singapore, the government has been taking a strong lead to help the building and construction sector enhance productivity and innovation through adoption of new technologies. In this respect, the Building and Construction Authority (BCA) is the lead government agency tasked with guiding the transformation.In 2010, the BCA formulated the Construction Productivity Roadmap (CPR) and launched the S$250 million Construction Productivity and Capability Fund (CPCF) to boost construction productivity. Another S$335 million was topped up to the fund in 2014 to quicken the pace of re-structuring.
Tightening Foreign Manpower Supply to Spur Change
Speaking in the Budget debates in March 2015, then Senior Minister of State (SMS) for National Development Lee Yi Shyan shared that the roadmap had adopted a 3M Framework, which tackled the productivity issue through three areas: manpower, machines and methods.For starters, the plan looked to spur change by reducing the sector’s heavy reliance on foreign workers. With international best practices showing that when workers are skilled or multi-skilled, construction projects typically require fewer workers while maintaining the same levels of quality, the government progressively tightened the foreign worker supply while increasing foreign worker levies.
To improve the skills of workers in the sector, the BCA set aside funds for their training and development, while introducing policies to favour the retention of higher-skilled foreign workers. Between 2010 and 2014, BCA funded training that helped the industry upgrade more than 74,000 in-service personnel from 6,000 firms.
In recent times, the sector has also responded with its own initiatives, with the Singapore Contractors Association (SCAL) launching its Foreign Construction Worker Directory System in October 2015. The online directory allows skilled foreign construction workers to list out their skill sets, thus enabling construction firms to source for trained workers reaching the end of their work permits. The net result is an increase in construction productivity through retention of skilled workers.
Better Technologies to Strengthen Productivity
The adoption of better technologies and methods of construction has been the other key aspects of the first productivity roadmap. Between 2010 and 2014, some 880 firms received funding from the Mechanisation Credit scheme. In addition, some 135 of these firms also received Investment Allowance, a tax credit, for purchasing productive machineries.One key technology that has been widely adopted in recent years is Building Information Modelling (BIM). This computer technology allows building performance to be simulated digitally, so that design conflicts can be collectively resolved upfront. This avoids costly reworking and wastage at later stages, saving time and effort.
Since its introduction in 2012, more than 80 per cent of the larger consultancy firms and 60 per cent of the larger contractors have adopted BIM. BCA has been pushing for the industry wide adopt of this technology to increase the productivity of the sector.
New Construction Methods to Enhance the Building Process
In terms of methods, the BCA has been pushing for the adoption of Prefabricated, Prefinished Volumetric Construction (PPVC) and the use of Cross Laminated Timber (CLT) in construction. PPVC is a method of construction in which apartment and room-sized volumetric units are fully fitted out and finished, before being transported to the construction to be installed into the building by stacking on top of one another. The PPVC method can potentially achieve up to 50 per cent savings in terms of manpower and time, depending on the complexity of the projects.In the CLT method, cross laminated timber is used for structural and wall components to replace concrete and steel bars, and brick walls. CLT is produced by pressure-gluing multiple layers of timber such that the wood grain of each layer is at 90 degrees to that of the next layer, redistributing the weight.
The resulting CLT panel is capable of bearing loads similar to that of concrete, but is 80 per cent lighter. Thus, the foundation for a building constructed with CLT will not have to bear as much weight. CLT allows for faster construction with fewer on-site staff, thus the waste, noise and dust pollution on the surrounding community. So far, the public sector has been pioneering the use of these methods of construction, although private sector developers are starting to incorporate them into their building designs too.
The Second Construction Productivity Roadmap
In many ways, the first Construction Productivity Roadmap (CPR) has largely achieved its objectives. Based on an industry survey, more than half of the firms have embarked on their productivity journey to explore alternative ways to build smarter, as a result of the productivity measures under the first Construction Productivity Roadmap. Site productivity, which measures the floor area completed per man day, has also been improving at an increasing rate. Site productivity improvement has also been a steady 1.4 per cent per annum from 2010 to 2014.With that in mind, the Ministry of National Development (MND) announced the Second Construction Productivity Roadmap in the 2015 Budget. Building on the 3M approach of the first roadmap, the latest plan added two new thrusts. The first thrust is the adoption of Design for Manufacturing and Assembly (DFMA). In simpler terms, DFMA requires the industry to manufacture as many building parts as possible in a factory. The prefabricated parts are then transported on site for assembly. In his Budget speech in March 2015, SMS (National Development) Mr Lee Yi Shyan shared that firms need new capabilities in design, engineering and manufacturing to embrace DFMA well.
The second thrust is to encourage the development of deep capabilities in the industry, helping the most progressive firms here move up the value chain by acquiring R&D, engineering and design capabilities. This thrust calls for the development of in-house cross-functional teams comprising architects, engineers and project management professionals.
To further fund the enhancement of construction productivity, S$450 million was set aside for the second tranche of the Construction Productivity and Capability Fund (CPCF) from 2015 to 2017 to help the built environment sector make higher investments in impactful productive technologies and improve the quality of its workforce. This is in addition to the current $335 million committed to help drive productivity in the sector.
Every Little Step Adds Up
Beyond the first and second Construction Productivity Roadmaps (CPRs), the BCA continues to collaborate with the industry at large on many other initiatives. For example, the BCA announced in October the first grant call for construction productivity under a research fund by the Ministry of National Development. Under this grant call, S$2.6 million will be used to fund research institutes and industry players to further develop game-changing construction technologies and increase their adoption in the built environment sector.Concurrently, the BCA also announced a revised tender evaluation framework for government construction projects will raise the weightage of productivity from 3 to 6 per cent, up to 10 per cent of the overall score from January 2016 onwards. This means that contractors with good productivity records in their past projects, along with investment in technology adoption and workforce development, will enjoy an advantage during such tender evaluations.
All in all, it can be seen that much time, efforts and resources has been directed towards the enhancement of construction productivity in Singapore. In many ways, this comes as little surprise given the economic importance of the building and construction sector, and amidst the rapid pace of Singapore’s economic transition.