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Construction industry sees light at end of tunnel

The Building and Construction Authority noted that public construction demand could come in at between $16.5 billion and $19.5 billion this year, with the total demand forecast to be between $27 billion and $32 billion. Upcoming projects include the Tuas mega port and Jurong Lake District.ST FILE PHOTO

Upturn in growth prospects and employment driven by large developments in the pipeline

It has been a tough few years in the building trade but construction boss Chua Tong Seng is finally feeling good about his company's prospects.

"I think things are getting better," he said, pointing to improved demand due to large developments in the pipeline such as the Tuas mega port, the Jurong Lake District and expansion of the integrated resorts.

"At least our staff are busy now," added Mr Chua, the managing director of geotechnical engineering consultancy Kiso-Jiban Singapore.

His optimism is reflected among other construction firms here.

Recent numbers point to light at the end of the tunnel for the sector, which posted its first employment gain in almost three years, based on last Thursday's labour market report for the first quarter of this year.

Total employment in the industry rose only 0.2 per cent, or 200 jobs, but that was something to celebrate after 11 consecutive quarters of decline.

In fact, construction was pinpointed as the sole bright spot in the economy amid general pessimism, according to a quarterly survey of professional forecasters by the Monetary Authority of Singapore released last Wednesday. It estimated that the sector will grow 3.5 per cent this year, up from the 2.1 per cent forecast made in March.

Construction grew 2.9 per cent in the first quarter over the same period last year - the first expansion for 10 quarters.

Things may even have been looking up before that, with some industry players noting an upturn in their fortunes since last year.

Mr Chua said his firm has won 30 to 50 per cent more contracts since the start of this year, compared with the same period last year, and there are plans to compete for more, such as the Cross Island MRT line project.

But the firm is not hiring more workers just yet.

One company that is expanding is Greyform, a wholly owned subsidiary of Straits Construction Group that specialises in prefabricated building components.


Greyform chief executive Bob Chan said it has added 12 supervisory staff since the start of last year, bringing the number of such workers to 80. "Based on the order books, we are going to be busy for the next two years, so we are already earmarking more executives to bring in," he added.

Mr Cao Jiyong, senior technical manager at Lim Wen Heng Construction, which specialises in general building and civil engineering services, said the number of projects has doubled since the start of last year.

The increased demand may be because of strategic planning by the authorities to parcel out public projects, which are set to make up about 60 per cent of projected demand this year.

The Building and Construction Authority (BCA) noted that public construction demand could come in at between $16.5 billion and $19.5 billion this year, with the total demand forecast to be between $27 billion and $32 billion.

Last year's total was $30.5 billion, marking a turnaround from declining demand from 2015 to 2017.

However, Mr Chan said demand is now geared more towards infrastructural, civil and industrial projects.

Kiso-Jiban's Mr Chua said that while bigger players will win tenders for the mega projects, he presumes jobs will trickle down to smaller players too.

This will be aided by the BCA's new collaborative bidding system introduced late last year. This allows firms to pool resources and tender for larger projects that would not have been possible if they were bidding as single firms.

Mr Kenneth Loo, president of the Singapore Contractors Association Limited (Scal), which represents about 3,000 companies, acknowledged the upward trend for the industry but remained cautious. He said: "How long it will last is anybody's guess."

Nonetheless, he expects the construction labour market to remain robust, noting the upcoming jobs for projects such as the North-South Corridor, a 21.5km expressway, and precinct-level developments such as the Punggol Digital District.

Besides external demand, Mr Loo also recognises that the industry has to shed certain perceptions and long-held practices to attract talent and ensure substantial growth is backed by productivity.

"It is not a sunset industry and we need to rejuvenate as the nation progresses. Buildings need to be upgraded and we can't do things as we did before," he said. "We need to give people (in the industry) a sense of purpose and change mindsets so they see value in transformation."

To this end, he pointed to Scal's Construction Hub, which will introduce the latest construction technologies to the industry when it opens in 2021.

Such transformative efforts may well go a long way towards making construction a thriving sector that can continue to attract the best and the brightest.

Greyform's Mr Chan said the chance to learn something new at his firm, such as production software for prefabrication, has helped in recruitment, with new hires coming from industries such as oil and gas.

The industry's future excites him.

"I'm definitely optimistic," he said. "The demand is out there, it's whether we can grab more. We just have to address our capacity as projects come on board."

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