Singapore Construction Industry overview
In recent years, due to the rapid development of public and private buildings in Singapore, construction industry has become one of the important engines of Singapore's economic growth. Singapore's construction industry has been growing at 3% since 2014. According to the data provided by building & Construction Authority, Singapore's construction demand in 2014 was between S $31 billion and S $38 billion (about US $24.8 billion to US $30.4 billion). The demand from Singapore's public construction sector, including Thomson metro line, East Metro Line, North-South Expressway, smart municipal housing rental plan, a number of health care infrastructure projects, and the construction plans of Changi Airport's 4th and 5th air terminals, remains the main support for Singapore's construction industry. However, due to the weak demand of residential real estate market in Singapore in recent years and the gradual completion of public construction projects, these would restrain the growth potential of the construction industry in the future.
In 2019, Singapore's "Commercial Times" published a column report that although Singapore's construction industry has ended two and a half years of business contraction, since 2019, the construction industry has started to grow again, and also accompanied by some construction industry that shows signs of turning around. However, some construction and civil engineering companies are still disappointed in this year's construction industry due to the epidemic situation and market environment trend and many other reasons. In this situation, some well-known construction companies have made substantial losses this year. So what are the specific reasons for Singapore's construction industry's decline in recent years? Let's analyze it together.
1. The slowdown of global economic growth, the weakening of housing market and the reduction of construction demand
2006-2008 was the golden period of Singapore's construction industry. The average annual growth rate of Singapore's construction market was 46%, and market demand was 16.8 billion, 24.5 billion and 35.7 billion Singapore dollars. After the 9/11 terrorist attacks and the "SARS" incident, the launch of two large-scale leisure complex projects, the Sands Hotel and Sentosa, inspired the long-term downturn in the construction market, with construction price indices soaring in 2007 and 2008. Today's situation is very different from the past. First, the Construction Bureau predicts that market demand in 2019 will be between 27 and 32 billion SGD in 2019, and between 27 and 34 billion SGD in 2020. The contract value will remain relatively stable. The second is that the current market downturn is mainly affected by the slowdown in global economic growth and the continued weakening of the housing market. It is different from the previous market environment. In recent years, the construction market has been fiercely competitively, with a large number of construction companies and low profits. The market may suddenly burst and the sexuality rate can low.
2. Fierce industry competition caused by open system: Low profit
Singapore has a small land area, a small population and a lack of natural resources, so the trend of the world economy and the regional economic environment have a great impact on Singapore's economy. In line with the principle of maintaining free competition in the construction contract industry, the competent authorities of Singapore's construction industry open up the construction contract market to the world. At the same time, it improves the overall competitiveness of the whole industry in the way of "tangible hand", which provides a fairly competitive environment for all kinds of local contracting enterprises and foreign-funded enterprises. At the same time, it also provides a stage for Chinese enterprises to correctly implement their competitive strategies and improve their competitiveness. However, fierce industry competition and reduced supply of foreign labor force make the industry's profit meager.
3. Shortage of manpower, the rising labor costs
According to Takungpao, Singapore's construction industry has long been short of manpower. In recent years, we have tried to attract new people through high salary. Zhuo Zhiwen, general manager of China Construction (Nanyang) group housing project, said Singapore's tightening of its foreign labor policy in recent years had made the shortage of manpower more obvious. At present, CSCEC Nanyang has 40% and 30% of its employees in Singapore, Chinese and Singaporeans respectively. Because of the high level of education of Singaporeans, people are reluctant to work on the construction site. In the past, the local government approved 1500 foreign workers for enterprises every year. In recent years, the number has gradually reduced to 800. In addition, there is a trend of further tightening. Zhuo added that in addition to the reduction of the number of foreign workers, the conditions for importing foreign workers are also increasingly strict. Only 15 universities in the mainland have been recognized as project managers, which makes it difficult for construction companies to find talents. In addition, the Singapore government also requires them to buy insurance for every foreign worker, which in turn increases the labor cost.
4. Countermeasures. Transformation for efficient high-tech industry
At present, Singapore's construction industry continues to face major challenges such as human resource contraction and increased operating costs. But at the same time, it also allows enterprises to think about the necessity of organizational restructuring. On the other hand, the upstream design and planning is bound to move towards more mature thinking to meet the needs of sustainable ecology, and towards more sustainable infrastructure development, such as the development of underground roads, the promotion of productivity and the introduction of innovative technologies. In order to improve the productivity of the construction industry, BCA hopes to provide simultaneous guidance from industry, enterprises and individuals, so as to avoid the dependence of enterprises on intensive labor force. In addition, BCA and various government departments, including Urban Redevelopment Authority, public utility board, Ministry of manpower and land transport authority, also cooperate with the planning of the Ministry of national development to develop innovative programs, encourage and assist in promoting new processes and technologies.
At present, Hong Kong's construction industry is transforming into an efficient high-tech industry, while small and medium-sized enterprises are worried that they will not be able to compete with transnational enterprises, and will be eliminated in this transformation wave. Li Zhisheng, the second minister of national development, said that the local industry should develop "Singapore style construction method" as an advantage to promote the vigorous development of the whole industry.
At a dialogue between the future economic council and Zaobao, Li Zhisheng said: "if we can connect design, construction, and even building maintenance and repair through digital technology, we will form a whole set of Singapore style building methods. Therefore, if foreign companies want to enter the Singapore market, they need to have certain capabilities. " Through the integration of digital technology in construction engineering, we integrate all aspects of architectural design, manufacturing, construction, delivery, operation and maintenance. It can greatly strengthen communication and coordination, avoid construction errors, save time and improve safety.
In 2009, BCA launched Building Information Modeling (BIM). BIM is a kind of 3D digital technology, which can enable professionals in different fields of the construction industry to carry out technical analysis of the building structure, and detect possible problems before construction, so as to effectively reduce the delay in the project. In recent years, with the gradual popularization of BIM, the efficiency of building modification can be improved and the project can be accelerated. For example, for the renovation or demolition of general shopping malls, the project period can be shortened to 2 weeks by adopting BIM. In this way, it can not only improve the efficiency and productivity of the construction industry itself, but also bring convenience to the public. In 2015, BIM has been adopted by 80% of large consulting companies and 60% of large contractors. In order to fully promote BIM, the Construction Bureau grants a subsidy of up to 50% to the technology.
In order to create a more livable, efficient and sustainable development town, in 2014, Singapore housing and development board launched the "smart town structure", which integrates technology factors into the construction of the town and injects more intelligent technology into the construction and development of group houses. Singapore's housing and development board started from the four main aspects of "smart planning", "smart environment" and "smart housing" and "smart Life". Through the use of information and communication technology, it improved town planning, service efficiency and quality of life of residents. In 2015, Binhai group housing area launched in Punggol Northshore will become the first smart residential area in the region. In this area, it includes intelligent parking lot, home power management system and home elderly alarm system. On the other hand, smart home energy pilot and integrated system modeling technology have been tested in Jurong area in Western Singapore since June 2014.
The prosperous history of Singapore's construction industry can be learned from the presence of more and more large international construction engineering groups. At present, many of the world's leading engineering companies choose to settle in Singapore, including Arup, Jacobs Engineering, KBR Fluor, CH2MHILL, WorleyParsons, CB&I Lummus, Foster Wheeler, Yokogawa, Emerson, Rockwell Automation and M + W Zander. The businesses of these companies cover different industrial groups, such as front-end engineering design, consulting, system development, project and construction management of petrochemical and biomedical industries.
In 2015, Singapore government allocated S $450 million (about US $328 million) to the second round of construction productivity and capability Fund (referred to as CPCF) to cooperate with BIM promotion. This will promote the production of more building parts in the factory for site assembly in the next few years to improve the productivity of the construction industry. This means that the funding ceiling of productivity innovation projects under the CPCF will be raised to S $10 million (about US $73.1 million), and enterprises can get up to 90% subsidy.