Speech by MOS Zaqy Mohamad at the BCA-REDAS Built Environment and Property Prospects Seminar
Jan 8, 2020
Good morning. Let me begin by wishing all of you a Happy New Year. I hope that all of you started the year well. Thank you for inviting me here today for the BCA-REDAS Built Environment and Property Prospects Seminar.
Sustained growth in construction demand in the medium-term
We have had a few tough years for the built environment sector between 2015 and 2017. Since then, construction demand has turned around.
In 2018, construction demand picked up to $30.5 billion, a 23% increase compared to the year before. In 2019, construction demand remained strong. BCA estimates that $33.4 billion worth of projects were awarded last year. This is slightly higher than the upper bound of the $27 to $32 billion projected for 2019, and represents a 9.5% increase in construction demand compared to the year before.
The private sector saw construction demand pick up in 2019, with higher than expected demand. This increase was predominantly driven by the construction of new petrochemical facilities and continued demand from residential en-bloc developments.
Construction demand in the public sector also grew in 2019 with the award of industrial and institutional building projects in the Punggol Digital District. This is on top of strong demand for major civil engineering projects.
Despite the economic headwinds and global uncertainties, we remain optimistic about the construction demand in the coming years. BCA estimates that $28 to $33 billion worth of projects will be awarded this year. The public sector is expected to contribute about 60% of the overall construction demand in 2020.
Beyond 2020, we foresee construction demand to strengthen further. BCA projects the construction demand to be between $27 and $34 billion per year from 2021 to 2022, and between $28 and $35 billion per year from 2023 to 2024. This growth will be supported by major developments such as Changi Airport Terminal 5, developments at Jurong Lake District, the expansion of the two Integrated Resorts at Marina Bay Sands and Resorts World Sentosa and new MRT lines such as the Cross Island Line.
Commitment from the public sector to take the lead in DfMA adoption
The public sector will continue to lead construction demand in the medium-term, contributing $16 billion to $20 billion per annum from 2021 to 2024. Building projects, including public housing developments, will contribute to approximately half of this demand. Public sector building projects will continue to take the lead in key transformation areas to increase productivity in the sector.
I am pleased to share that HDB will continue to champion Design for Manufacturing and Assembly, or DfMA, in its housing projects. This year, HDB is targeting to adopt DfMA for 75% of its units launched. This will be achieved using Prefabricated Prefinished Volumetric Construction (PPVC) and Advanced Precast Concrete System (APCS) technologies.
HDB has adopted PPVC since 2016, and will be adopting PPVC for 30% of units launched this year. PPVC involves the fabrication of modules off-site in a controlled manufacturing environment, which are later brought to site for assembly.
Last year, HDB also embarked on the adoption of APCS. Moving forward, HDB will be adopting APCS for 45% of units launched in 2020. APCS speeds up construction by using larger precast components that reduces the amount of temporary support structures needed on site. It also uses mechanical connections, which minimises the wet works we use onsite.
Digitalisation will continue to drive the transformation of the Built Environment sector
With stable and sustained growth in construction demand over the next five years, it is important that our companies take advantage of these conditions to leverage technology and digitalise their operations. We want our firms to be more productive and competitive to seize opportunities, not just in Singapore but also internationally.
One focus is Integrated Digital Delivery, or IDD, which makes use of Building Information Modelling, or BIM, advanced infocomm and smart technologies to transform the way we build. IDD integrates the entire built environment value-chain from design, construction and fabrication all the way down to maintenance.
Firms, which have embarked on the IDD journey, have reported an increase in productivity, and a reduction in costs. For example, BHCC Construction shared that it aims to achieve 30% time savings during the design stage of a project by using a Virtual Reality (VR) collaboration system. The system allows members of a project team to collaborate and coordinate designs by merging BIM data into a single model. During the construction stage, BHCC Construction achieved 25% time savings by using a project management platform. The platform enables all project parties to be updated on the progress of the project, including status tracking of precast components. BHCC Construction also targets to achieve 25% time savings by digitalising its management of site safety records.
The benefits of IDD also extend to Facilities Management (FM). At the PSA Tuas Port Maintenance Base, which is currently under construction, the project team will be integrating the building’s BIM data into an asset management system. This will allow the future FM team to plan and execute building maintenance work with 20% efficiency improvement.
Building a strong local core in the Built Environment sector
The built environment sector in Singapore has made significant progress in its transformation journey. We now have more developers, construction firms and FM companies on board that have built capabilities to deliver projects that involve DfMA, IDD as well as green buildings. Our local builders have the expertise and capabilities to undertake complex, large-scale projects such as Jewel Changi Airport and Gardens by the Bay. This has helped to build our reputation and enabled many of our firms to expand.
To sustain the good progress we have made in our transformation journey, the built environment sector also needs to be anchored by a skilled and competent local workforce at the core.
Over the years, construction was always perceived to be a ‘brick-and-mortar’ industry. Compared to manufacturing, services, banking and technology, many locals opted to join sectors that seemed to have better working environments and less manual work. Using traditional design and construction methods, employers could readily find less-skilled, lower-cost foreign workers to fulfil these jobs in the industry.
Putting the two factors together, we have observed that the proportion of the construction industry’s Professionals, Managers, Executives and Technicians (PMETs) jobs taken up by locals has been less and less. We have seen that fall over the past decade, even though our total local PMET population has increased.
Today, what we are doing here with DfMA and IDD, we invest significantly to transform our built environment sector to create better jobs for Singaporeans and improve the productivity and output of all our firms. Therefore, it is important that we ensure that the sector continues to be driven by a skilled and capable Singapore core, to lead and drive the sector into the future.
At the PMET level, we have created many new and attractive jobs through the transformation of the industry. For example, positions such as ‘Digital Delivery Manager’ or ‘Buildings Digital Lead’ are high value-added jobs that will allow our local PMETs to take on meaningful roles in our IDD journey. As our industry demand for DfMA grows, jobs such as ‘Production Manager’ have emerged to oversee the technical aspects required for the production of components off-site, and delivery on-site. Firms that need advice to leverage technology and redesign jobs to increase productivity and value for trained professionals may come to us for advice and support.
It is important for firms to invest in a local core in order for their business growth to be sustainable for the future. To support the development of our local workforce in the industry, we have been working closely with our industry partners including service buyers, industry associations such as REDAS and SCAL and IHLs such as ITEs, polytechnics and universities.
First, we want to build a pipeline of skilled local graduates from our IHLs and mid-career professionals, in particular in engineering and project management. These jobs are core to construction, which we are focussing on to build better career and wage prospects. Second, we are also bringing buyers and developers on board, to create a healthy environment where contracts are awarded based on quality. Competency-based procurement will create conducive market conditions that reward professionals who are prepared to upgrade and enhance their skills. These will be supported by initiatives such as iBuildSG Scholarships and Sponsorships, Adapt and Grow, and IHLs’ Work-Study Programmes. We have worked with the industry and IHLs to develop the Built Environment Skills Framework, which we will launch later this year. The quality and skills of our workforce are important to our competitiveness – locally as well as internationally. The framework will clearly chart out career progression pathways for key job roles in the sector.
But more remains to be done. For example, in 2018, BCA launched the BIM Professional Conversion Programme (PCP), which supports mid-career PMETs to acquire the necessary competencies to embark on a career as BIM professionals in the built environment sector. However, few firms have taken this up, as compared to the PCPs in other sectors such as healthcare and manufacturing. So, we will need to work with you to help more fresh graduates and mid-careers enter the sector.
The Government is also looking at how to further strengthen our policy framework to support a strong local core. We will announce the changes when the details are ready.
With the positive outlook for the sector in the next five years, our firms should look ahead and make good use of the opportunity to digitalise, invest and build on our innovation-driven growth and groom local talent.
I would like to thank REDAS for collaborating with BCA, and I hope that everyone has a fruitful seminar later.
I wish you all the best for the new year. Since we are in the season too, I wish you happy Lunar New Year in advance and welcome the Year of the Rat too. Thank you very much. Have a wonderful year ahead.