Singapore Grapples with Construction Productivity: Automation vs. Foreign Labor
Singapore is facing significant challenges in boosting construction productivity despite government efforts to promote automation. Reports indicate that high-tech factories, known as Integrated Construction and Prefabrication Hubs (ICPHs), designed to accelerate the production of precast components, are operating at a loss. This situation highlights the complex interplay between policy, industry practices, and labor dynamics in the sector.
The ICPH Challenge: Sticking Points and Policy Shifts
Operators of ICPHs have identified several factors hindering their profitability, including storage issues, competition from Malaysia, and, critically, changes to government policies. These facilities, launched in 2012 with the aim of automating the production of precast components, have struggled to meet initial expectations. While the government initially planned for 10 ICPHs by 2020, only six have been built. Construction firms have invested heavily, reportedly over $100 million each, but are finding it difficult to turn a profit.
According to The Straits Times, policy changes, particularly the phasing out of certain 3D precast components in 2024, have significantly impacted ICPH operators who invested in specialized equipment. Associate Professor Walter Theseira of the Singapore University of Social Sciences noted a disconnect between firms' expectations and policymakers' assessments regarding the cost-effectiveness of ICPHs and certain components.
Three Key Lessons for Successful Automation
The challenges faced by ICPHs reveal three crucial lessons necessary for successful automation in construction:
- Close Collaboration between Policymakers and the Industry: Open communication and proactive engagement are essential for aligning technological investments with evolving policies.
- Standardisation of Building Components: Consistent designs and component types are crucial for optimizing automated processes.
- Healthy Balance between Foreign Labour and Automation: Rethinking Singapore's reliance on low-wage migrant workers is necessary to incentivize investment in productive technologies.
Standardisation: A Catalyst for Automation
Standardisation is a vital factor in promoting automation. Consistent and predictable processes are key to maximizing the efficiency of automated systems. By standardizing precast components, ICPH operators can utilize the same molds for a fixed range of components, reducing the need for custom orders. Colin Bullock, a construction and project management consultant, emphasizes that greater standardization will encourage investment in ICPHs by allowing precasters to use their products across multiple projects.
Efforts by the Building and Construction Authority (BCA) and the Housing Board (HDB) to standardize precast components, such as prefabricated bathroom units and household shelters, are seen as positive steps. Public agencies can play a significant role by setting standards for public construction projects, which can then influence private developers to adopt similar practices.
The Foreign Labour Conundrum
A significant impediment to automation is Singapore's reliance on low-wage foreign labour. Despite government calls to reduce this reliance, the number of work permit holders in the construction, marine shipyard, and process sectors has increased by 28.4% since 2018. Prof Theseira argues that employers lack the incentive to invest in productive technologies as long as hiring migrant workers remains a cheaper option.
Economists Linda Lim and Pang Eng Fong have highlighted that Singapore's dependence on foreign labour contributes to low productivity growth, jeopardizing the country's economic competitiveness. The COVID-19 pandemic further underscored the vulnerability of relying on foreign labour.
Prof Theseira poses a critical question: Is the priority providing affordable homes and buildings through labour-intensive practices, or improving productivity through automation, accepting potential cost increases in the short to medium term? Ultimately, a trade-off may be necessary to establish the foundation for productive technologies to thrive.
If Singapore aims to build homes, offices, and malls faster, safer, and with less manpower, the growing pains associated with adopting automated technologies may be a worthwhile investment.
