Singapore's construction sector will remain robust at least over the next five years, buttressed by strong public spending on healthcare and transport infrastructure.
The Building and Construction Authority (BCA) estimates that between S$29 billion and S$36 billion worth of contracts will be awarded in 2015. Public sector projects are expected to account for 60% of the total, up from 52% in 2014. With a tepid housing market, demand from the private sector will ease further from S$18 billion in 2014 to between S$11 billion and S$15 billion in 2015.
Further ahead, the BCA expects contract values to range from between S$26 billion and S$37 billion per year between 2016 and 2019.
In 2014, the industry posted a new high of S$37.7 billion, an increase of 5.3% over 2013 and 34% over 2012. Speaking at the annual Built Environment and Property Prospects Seminar in January 2015, Minister of State for National Development and Trade and Industry Lee Yi Shyan urged the industry to capitalise on this healthy pipeline of construction projects over the next five years "to press on with the restructuring of the built environment industry, in search of excellence".
Building on Productivity Gains
Productivity remains one of the industry's biggest bugbears, as the industry has largely lagged behind its peers. Several initiatives have been rolled out under the First Construction Productivity Roadmap, launched in 2011, to raise construction productivity, such as raising the minimum standards for building designs and embracing labour-saving technologies.
This has generated some results. Average site productivity, which measures the floor area completed per man-day, rose by 1.4% per annum between 2010 and 2014. Increasing technology adoption also led to greater efficiency. About half of all new residential non-landed projects used drywalls in 2014, up from about a quarter in 2010. Over the same period the adoption rate of system formwork also grew from 30% to 72%.
The Second Construction Productivity Roadmap seeks to build on the productivity gains by encouraging more projects to adopt Design for Manufacturing and Assembly (DFMA). At its simplest, DFMA requires the industry to manufacture as many building parts as possible in factories for on-site assembly and installation.
Game-changing technologies such as prefabricated prefinished volumetric construction (PPVC) and engineered timber systems like cross laminated timber (CLT) can be adopted to achieve this end. PPVC involves the assembly of whole rooms or apartment units complete with internal fixtures that are produced off-site and installed on-site much like Legos. Manpower and time savings of potentially up to 50% can be achieved. CLT – a lightweight and flexible material that can bear heavy loads – can achieve up to 35% savings.
Companies can draw on the Construction Productivity and Capability Fund (CPCF), which was created as part of the government's efforts to help the construction industry improve productivity and strengthen its capability. An initial tranche of S$250 million was committed in 2010, which was later topped up to S$335 million to quicken the pace of restructuring.
Under the new roadmap, the government is injecting a further S$450 million into the CPCF. The additional funding is expected to benefit about 7,000 built-environment firms. To encourage companies to adopt construction technologies that make a difference, the BCA is raising the funding limit of the Productivity Innovation Projects scheme under the CPCF from S$5 million to S$10 million.
Said BCA's CEO John Keung: "For game-changing technologies that are very new here, there is a cost premium...If you leave it to the market to decide, it's very difficult for anyone to make that decision to spend more, so we need to kick-start this process. We have not been doing this for decades. So now, when we want to change the way we build, we have to pay to learn. One way is to give some incentive to defray part of the additional costs that the developer may have to pay, so they will have more incentive to go for these technologies."
Under the Workforce Training and Upgrading Scheme of the CPCF, the BCA will give higher subsidies of up to 90% for locals to attend productivity-related courses.
The BCA is also moving much of the training upstream. Bespoke versions of management programmes are being rolled out to target CEOs and senior management, people who can more effectively influence change in their organisations. Mr Keung said: "Hopefully, by tackling the workforce at all levels, we stand a better chance in the next few years to really change the way we build."
Public Sector Leads the Way
The public sector is driving change in the industry. The BCA is working with the Ministry of Health (MOH) to deploy productive and game-changing technologies as they ramp up the infrastructure to meet increasing demand.
The Yishun Community Hospital – Singapore's biggest community hospital with 428 beds – is held up as an example of what can be achieved. To complete the project within a tight deadline of 22 months, main contractor Kimly-Shimizu JV employed a building method where construction started from level one upward and downward simultaneously. This differs from the conventional way of construction where work will start sequentially by excavating from the lowest floor, usually the basement, and then moving to the upper levels.
The innovative method helped the team to slash four months off its construction schedule, allowing it to meet the deadline. Another innovative construction method by Kimly-Shimizu JV involved using the precast column structural steel (PCSS) system which combines the use of reinforced concrete columns and structural steel beams. This method is typically used in the private sector. It helped the construction team to build one level in nine days instead of the average 14 days, saving a total of five days for every level constructed. Yishun is the first public hospital that is built using the PCSS system.
The MOH is also piloting the use of PPVC for a nursing home in Woodlands Crescent. Speaking at the Healthcare Infrastructure Technology and Engineering Conference in October 2014, Dr Amy Khor, Senior Minister of State (Health), said, "Given the volume of healthcare projects in our pipeline, we can play a part in helping the industry build up its capabilities to deploy new construction technologies which will, in the end, help us build better and faster in a sustainable manner. As such, we will be applying the use of productive technologies such as piloting the prefabricated prefinished volumetric construction system in a new nursing home project at Woodlands Crescent and multi-trade prefabrication of modularised assembled components like bathrooms, patient rooms and exterior elements for some of the upcoming healthcare projects."