How has COVID-19 impacted Singapore's Construction Industry

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We are entering the third year of the pandemic, where the nation is slowly preparing to return to life before COVID-19. The construction industry was one of the industries that was hit hard during the pandemic, especially in Singapore. In this article, let’s revisit some of these challenges and the ways the industry has responded.

Manpower

Employing over 450,000 workers (most of them being migrant workers), the island nation’s construction sector saw its workers affected disproportionately. Shared accommodation facilities such as dormitories, operating with the purpose of housing all migrant workers, became hotspots for COVID Infections during the country’s height of the pandemic from April to June ’20. May 2020 saw a transmission rate of 1426.6 per 100,000 workers. Many migrant workers were quarantined at their accommodations, which combined with the tight Circuit Breaker measures, meant many construction projects were put on hold.  

Border controls around the world meant Singapore was unable to hire migrant workers from countries such as India, China and Bangladesh, countries where it gets most of its workers from. This created more issues for the construction industry, even after local safety measures were lifted, as global travel had yet to resume like before.  

As border restrictions begin to ease in 2022, we are positive that the worker shortage situation will soon begin to improve.  

Supply Chain  

In relation to the previous point, although Singapore had curbed transmissions, most other countries had not yet done so. These countries, such as India, China and Malaysia who supply manpower and materials were still under restrictive measures.  

HDB faced a major setback in terms of supply chain, during constructions of BTO blocks, which are mostly built using prefabricated, pre-finished entire units built in factories and assembled on site. The components for this are transported from Malaysia, which meant construction was slowed immensely due to border restrictions and movement restrictions locally.  

As of recently, three BTO developments in Singapore face significant delays of 6-12 months, from their original intended completion date. This is mostly due to supply chain issues from China, as it faces more uncertainty and complications in regard to its worsening COVID-19 situation.

Cash Flow  

During 2021, a significant number of business entities within the construction sector ceased operations, many who closed due to cash flow issues.  

Before the pandemic, many construction firms bid for projects without considering the risks that arose during the pandemic, something which many could not foresee. Contractors who bid low below the build-up cost were now hit with skyrocketing labour and material costs, from the pandemic. These firms were not able to sustain from low cash flow and rising costs. Coupled with safety measures and strict border control, many firms ceased operations.  

Looking forward...

In Singapore, the BCA has pledged about $184 Million to accelerate transformation in the construction industry, focusing on the creating a future-proof and resilient built environment. We are hopeful about this injection which is bound to play a huge part in helping the sector to recover from the impacts of COVID-19.  

Doxa is firmly supporting the construction sector through its cost-effective solution, Doxa Connex. Find out more by requesting a demo here today.

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