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At a roadworks site in Chinatown, one foreign worker cuts metal bars while four others stand around and watch. Other workers at the site are tasked with directing traffic. Such unproductive work practices are common at construction sites around Singapore. -- ST
What ails Singapore's building industry?
It's a statistic repeated over and over again in recent weeks: Productivity in Singapore's construction industry is one-third that of Japan's and half that of Australia's.
In the first of a two-part feature, Insight finds out why the sector has fallen so far behind and what it can do to surge ahead.
At a roadworks site in Chinatown, one foreign worker cuts metal bars while four others stand around and watch. Other workers at the site are tasked with directing traffic. Such unproductive work practices are common at construction sites around Singapore. -- ST
What ails Singapore's building industry?
It's a statistic repeated over and over again in recent weeks: Productivity in Singapore's construction industry is one-third that of Japan's and half that of Australia's.
In the first of a two-part feature, Insight finds out why the sector has fallen so far behind and what it can do to surge ahead.
AT A construction site along a busy road in Chinatown, a solitary worker welds a piece of steel. Four of his colleagues stand around watching him.
Meanwhile, scattered around the site are workers whose task is to direct the flow of traffic.
It is a scene many motorists encounter at roadworks around the island.
But if all goes to plan, such a glaring example of unproductive work will soon be a thing of the past.
The men directing traffic will be replaced by automatic signals, and there will be no more stand-and-stare workers.
During the Budget speech two weeks ago, the Government unveiled the country's new productivity-based growth strategy. As the Finance Minister laid out the plan, he gave the building sector a good hammering.
It was singled out as the industry with the poorest productivity record in Singapore - with levels half of that in Australia and a third of that in Japan.
Much of the blame was pinned on companies being over-reliant on cheap foreign labour and reluctant to invest in innovation.
A basket of measures was uncovered aimed at raising productivity growth in the sector from below 1 per cent to somewhere between 2 and 3 per cent. The measures include subsidies for labour-saving technologies and a gradual rise in foreign worker levies.
The Government's sudden focus on construction has made people sit up and take notice of what has been a traditionally low-profile sector.
Given that Singapore has been enjoying a building bonanza in recent years - think integrated resorts, new Mass Rapid Transit lines, Housing Board flats and condominiums - how did the sector fall so far behind?
Is there something fundamentally wrong with how it has been operating? And if so, are levies and grants the right tools to give it a lift?
Why Singapore lags behind
TWO years ago, Ginlee Construction director Tommy Lim thought he had scored something of a coup - he hired a young local foreman.
'He was a young guy, 20, just after national service. He had only secondary school qualifications but it was okay, we were willing to train him,' says Mr Lim.
However, it would be a short-lived coup. Two days into the job, the foreman stopped showing up for work.
'It turns out he couldn't take the heat and didn't want to do the work any more,' recalls Mr Lim, who has close to 100 workers, nearly all of whom are foreigners.
The story is symptomatic of a larger problem plaguing the construction industry, in that it requires an inordinate amount of labour to get a job done, and much of this labour is poorly skilled and transient.
Though an over-reliance on cheap, low-skilled foreign workers may have been identified as a cause of the low productivity, construction bosses are quick to point out that finding local workers here is a fool's errand.
The work is seen as low-paying, dirty, and unrespected - hardly the pick of a local with choices.
'You accidentally hit someone on the road, chances are that person will have a degree or a diploma. These people won't want to do this job,' says Mr Lim.
Not that this should surprise anyone.
Even as far back as the 19th century, Singapore's buildings were already being put together by foreigners - Indian convict labourers and samsui women from China.
So what's the problem with foreigners?
While no one has any illusions that Singaporeans can take over the building work here, observers point out that relying heavily on foreigners puts a cap on growth. The country is said to be nearing the limit of the number of foreigners it can accommodate.
A too-large presence of transient foreign workers exacts social costs that go unmeasured in these economic indicators. And the fact that many move on after a few years means the skill level of these builders never goes up.
Mr Lim Yew Soon, a director at construction firm Evan Lim and Co, describes the typical life cycle of a foreign worker: 'He comes from a developing country where he is trained only in the traditional methods. He is new to the environment and the work but he learns slowly.
'After two years when he has picked up some skills, he leaves for a place where the pay is better and the weather is better.'
Labour, though, forms only part of the equation. Industry experts say there are two other roadblocks.
The first is the business culture, especially when it comes to how the main contractors and sub-contractors work together.
Explains Dr George Ofori from the National University of Singapore's (NUS) department of building: 'In Japan, the main contractor is very interested in how the sub-contractor does the work, the relationship between them is very tight.
'Together they will be exploring better methods, how to minimise resources, improve areas where they don't do so well.'
In Singapore, he says, partnerships tend to be formed purely on who puts in the best bid. A contractor may be changing sub-contractors with every project, and 'just wants the sub-contractor to finish the work, he's not interested in whether the guy brings 10 foreign workers or 100'.
The second, bigger problem is the highly cyclical nature of the industry. In the past, the local construction scene had jumped unpredictably from terrible lows to great highs in very short timeframes.
For instance, between 1998 and 2006 as Singapore was hit by one economic crisis after another, the construction sector went through a sustained period of negative growth.
When the sector bounced back in 2006, it did so with a vengeance. Construction demand shot up 40 per cent every year for the next three years.
The upshot of this unpredictability is a preference for foreign workers on short-term contracts, rather than expensive machines.
Says Professor Chan Weng Tat of the department of civil engineering at NUS: 'It has sometimes been suggested that having a large pool of foreign workers is the most pragmatic way for the industry to ride the economic cycles.'
Is Australia a model?
WHILE Japan and Australia have better productivity numbers, the two countries might not provide the best models for Singapore. They have certain inherent advantages that make work far more efficient than in Singapore.
For instance, the temperate weather in both countries gives builders a more comfortable outdoor work environment.
Both also have a largely homogenous, all-local labour force. There is no need to translate between different languages unlike on construction sites here.
Australia even has a size advantage - a large Australian man can carry something that might otherwise require two Bangladeshis.
Perhaps more significantly, the culture in both Japan and Australia accords some recognition to builders and tradesmen. In Singapore, the trade carries a certain stigma.
Given all the constraints, Mr Andrew Khng, president of the Singapore Contractors Association Limited (Scal), thinks local builders have not fared as badly as they have been portrayed.
He finds it unbelievable that Singapore could be so far behind Australia. 'An Australian bricklayer makes $4,000 and a Bangladeshi makes $1,000 a month. Bricks are all the same size. He cannot be that much more productive,' he counters.
What can be done?
FOR most, the lowest hanging fruit that firms can reach for to become more productive is automation.
Many construction bosses can rattle off a laundry list of new innovations that could, in theory, be deployed in Singapore.
There are fancy machines that can replace the work of a handful of workers, and techniques that can save time and labour on any site.
Yet, only a handful of the over 10,000 construction firms here use them.