In addition to $335 million in the pipeline announced 5 years ago, the National Development Ministry has recently announced they will pump in a further $450 million funding to increase construction productivity.
The government hopes that Singapore construction firms will adopt productive constructions methods typical in Europe and promises that manpower needs can be cut by half or more.
Unfortunately, the labour productivity of the construction sector has been lackluster over the past 5 years despite the hundreds of millions in funding. Labour productivity growth for construction in Singapore for 2013 and 2014 was -2.6% and -2.3% according to Singstat [Source]. This data contradicts the rose-tinted picture the PAP government claimed of 1.4% growth since 2010 [Source]. The PAP government however incredulously believe that with this new $450 million funding, productivity growth will be at least 2-3% every year until 2020.
The PAP government has also increased the funding limit for adoption of “impactful technologies” of each construction firm from $5 million to $10 million. Singaporean employees of these companies can also receive up to 90% subsidies under the Workforce Training and Upgrading scheme. However a quick check on this scheme revealed that foreigners are entitled up to 40% in funding for PMET courses too. Degree courses in Civil Engineering or any tertiary engineering degrees are also not covered in this scheme [Source].
It is hence unlikely the construction industry will see any further productivity growth with half-hearted measures in place for training. With the continual trend of falling productivity, it is also likely salaries in the construction sector will continue to be depressed and further deter Singaporeans in the high cost environment. The average construction worker typically comes from Bangladesh, India and China. They earn about $700 in basic salary and they are housed in overcrowded dormitories. All foreign construction workers have to work overtime to supplement their low basic wage and their overtime working hours are unsupervised by the Manpower Ministry. In 2013, several groups of Indian foreign workers rioted in Little India over poor living conditions and low wages.
Do you think Singapore construction companies can be productive so long they continue to hire cheap foreign labor?