Construction boom, but challenges loom

SINGAPORE - The construction boom shows no signs of ending any time soon, but a shortage of workers means projects may cost more and take longer to complete.

Experts say the strong construction demand is expected to continue with many big projects in the pipeline, including public housing and infrastructure works such as the MRT's Thomson Line.

While this is good news for the industry, contractors say they are struggling to cope with the manpower shortage.

This year's total construction demand is a projected $28 billion to $34 billion, compared with last year's $30.7 billion.

Work permits in the construction industry have risen to 306,500 this June, from 180,000 at end-2007. But labour quotas for each project have been nearly halved since 2010.

"For every 10 workers you could have engaged then, you can get only 5.5 workers now," said Singapore Contractors Association president Ho Nyok Yong.

With fewer workers to do more work, completion of some projects is being delayed by "several months", he said.

Straits Construction executive director Kenneth Loo said: "Some projects will be prolonged, some will not. It depends on how they're managed."

Last month, National Development Minister Khaw Boon Wan said the Housing Board is on track to deliver its new flats on time - 13,600 this year and 28,000 next year.

However, estimated waiting times for Build-To-Order homes have lengthened. The 1,330-unit Matilda Edge in Punggol, launched last month, has a timeframe of up to 47 months. In contrast, the ministry's statement in 2010 stipulated that buyers would wait about 30 months.

The wages of workers have also risen, raising business costs.

Dr Ho estimated that hiring a worker within a contractor's quota now costs around $1,800 to $2,000 a month, compared with $1,200 five years ago.

This is on top of rising living costs. Accommodation fees have risen to $270 per worker a month on average, compared with $150 three years ago. Medical insurance for workers has also doubled, noted Dr Ho.

To cope with the manpower and business challenges, a number of construction firms are trying to raise their productivity.

For example, the SEF Group uses automated wheel washers for its dirty vehicles, which frees up workers to be redeployed elsewhere. It has also built a hub to produce precast materials, said project director Raymond Chan.

But prefabrication as a way of raising productivity has its limits, said contractors.

Mr David Christodoulou, regional operations manager of construction firm McConnell Dowell, said: "We're already doing a lot of precasting, so our opportunities to become more productive are not so great. Certain trades such as concrete works are very labour-intensive. You can't replace humans with robots."

Additional reporting by Daryl Chin

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