Gloomy prospect for Singapore construction sector

Singapore 25 Nov 2014
Gloomy prospect for Singapore construction sector

Despite forecasts for Singapore’s economy to grow by 3% the prospects for the construction sector look gloomy.

Construction growth came in slightly stronger than expected with a revison of  1.7% YoY from the previous level of 1.4%.

Despite the revision however, the outlook for this sector remains cloudy. Margin compression, labour crunch and a cooling property market will continue to weigh down on growth performance for this sector, in spite of earlier efforts by The Government to pump up to S$335 million into the construction sector to raise productivity.

An international panel of experts formed to recommend productivity-enhancing measures has called for as much offsite work for projects to be done as soon as possible. It has also identified a need for further research and development in construction.

The panel noted that developers may be wary about incurring higher costs with new building methods. Dr John Keung, co-chairman of the panel and Chief Executive of the Building and Construction Authority (BCA), said: “At the initial stage, there could be some of these cost concerns. But once we build up that ecosystem, once we can generate enough demand, achieving the economies of scale, I am quite sure it will be cost-effective.”

The BCA is currently working on the second Construction Productivity Roadmap, which will be released in 2015.

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