Rebuilding again: What’s post-COVID-19 for the Construction Industry?

Rebuilding again: Post-COVID-19 for the Construction Industry

Singapore exited the circuit breaker period imposed to stem the spread of COVID-19 in June, and it is 2 out of 3 phases into successfully opening up the economy. The Building Construction Authority (BCA) announced a gradual resumption of construction works from Jun 2, when the circuit breaker ceased based on the declaration that stringent measures are in place to ensure safe distancing at worksites before they would be allowed to resume.

However, this process has been doom and gloom for the construction industry. The BCA on 17 Sep revised its projected $28 billion – $33 billion construction demands at the start of the year to $18 billion – $23 billion. This report also disclosed that the construction demand is bound to recover to some degree only from 2021. This drop is not specific to the private or public sectors in the construction industry in Singapore as they’re all still grappling with rebounding from the two-month standstill.

Construction industry business owners are especially struggling to keep their heads afloat and gain back productivity and efficiency whilst actively avoiding further transmissions with health and safety protocols. This is also due to the industry’s reliance on resource management and postponements in project implementation timelines that have been heavily affected by the halt. 

This article begins with the details of the industry’s passed pandemic effects and the hardships faced in the present state, followed by some lifelines available to them and some recommendations for their future.

Covid-19 for the Construction Industry

The ‘circuit breaker’ was essential to curb the transmission of the COVID-19 virus in Singapore. Although the effects of the pandemic and its resultant halt briefly clouded the outlook of the City’s economy, most industries have already picked up their pace in efficiency and productivity smoothly with the progression in phases. The Construction industry has, however, yet to see any relevant progress until today, due to unfortunate circumstances that will be delved in detail in this section. 

The halt applied to almost all construction projects as the risk of exposure is no different for these construction workers, owners and suppliers than for the general public. This halt had exceptions only for the most critical infrastructure works that had to proceed for safety purposes, involving only 5% of the construction workforce. Likewise, the BCA regulations only authorised minimal works pertaining to maintaining the job site during this circuit breaker period. This stalling of all the other construction projects has snowballed progress payments and losses throughout the construction supply chain. Not to mention, the consequent supply and demand shock will possibly result in deep slumps leading to an up and down recovery as opposed to a steady curve.

In addition to the proof of abiding by the 3 COVID-Safe restart criteria regulations (COVID-Safe Workforce, COVID-Safe Worksite, COVID-Safe Worker Accommodation and Transport) that have been put in place, business owners are required to go through the ‘green code certification’ process of their workforces for approval to restart. This is collectively issued by the BCA, Ministry of Manpower (MOM) and Health Ministry to verify workforces are virus-free. Yet, despite firms being ready to go during phase 1, the BCA actively prioritised only time-sensitive projects to proceed.

Construction industry business owners are also inevitably bearing the brunt of the resurging virus cases at the construction worker dormitories. Despite the added measures and manpower costs absorbed by the business owners, they also have to fulfill the basic regulations to put these workers up at different accommodations and staggering work hours to reduce transmission. This distress still continues as the construction work resumption is very short-lived. This is mainly due to the resurgence of COVID-19 cases and new clusters getting gazetted in construction worker dormitories, as previously tested and declared workers start testing positive again. These firms that face restart issues, in terms of safety as workers go back to being put on stay home notice (SHN), are forced to shut down again, thus affecting the productivity and efficiency of businesses. Not to mention, the supply and demand double whammy faced by this sector, especially in Singapore due to the heavy reliance on foreign workers.

Some construction businesses are entirely dodging this constant ticking time bomb as a result of their foreign workers not residing in dormitories. These firms are thus able to resume smoothly with just the basic workplace safety measures. Still, they also await the gradual tandem resumption. This is due to the contractual implications in the supply chain with the dampening of the global economy. This further perpetuates the delays in project completion, and the only solution would be the efficient clearance of backlog with the help of technology. 

All these factors aggregate to make the effects of the pandemic more pronounced in this sector. 

Fueling Rebound: Government initiatives in place to support these construction businesses

Amidst the complex regulations and policies established for the construction industry to abide by, the government has also rolled out support grants and schemes to provide financial assistance to tide them through these tough times, as well as post-COVID-19.

A new S$1.36 billion funding was introduced as a Construction Support Package to help firms cope with the impact of COVID-19 and bolster them to resume work safely and rapidly. This package is composed of the S$525.8 million construction restart booster available for construction firms that incur compliance costs unique to the sector to resume works safely. The government is also willing to absorb all testing costs of workers until 31 March 2021. This support is similar to the original S$33 billion Fortitude Budget granted to individuals and businesses, in general. The constituents of the support are the JobSupport Scheme (JSS) for employees in the Built Environment sector to still continue with employment and extension of Foreign Worker Levy waivers and rebates for businesses to afloat.

The Singapore Government has been encouraging construction businesses to consider digital transformation by financing these digital transformations with schemes. The Advanced Digital Solutions scheme is one of such. It is a S$20 million funding supported by the BCA and the Infocomm Media Development Authority (IMDA), allowing local construction companies up to 80% funding (capped at $200,000) to offset the cost of adopting digital solutions. This offers construction firms the best opportunity to implement long-term digitalisation and successfully transform their businesses by pushing for automation. 

During the recent Future Economy Conference and Exhibition (FECE), leading trade associations, key industry leaders and government organisations were brought together to discuss the future business landscape. It focused on how businesses can restore and transcend the effects of the pandemic by using modern digital technologies such as data analytics to speed up the recovery process. 

The Singapore Business Federation and IMDA also revealed during the virtual meeting that they have renewed their agreement over the next 3 years to continue steering towards digital transformation and position firms in the business community to seize more opportunities. The Digital Resilience Bonus was also introduced during this conference, which entitles firms that have implemented digital solutions with incentive payouts of up to $10,000.

There are all these helplines aimed to relieve and tide the construction industry through. It also aims to cushion them through adopting solutions to alleviate dependence on workers and bear the costs of project delays and supply chain management. 

And now, it does seem like the construction industry is on the right track.

Embrace technology and adapt rapidly for the long-term

With the challenges faced due to COVID-19, businesses, especially those from the construction industry, would have understood the value of resilience, as the vulnerability has been observed from the extreme hurdles of the pandemic, unlike any other essential sectors. Construction businesses have to start thinking long-term, not just to avoid this ‘multiplying effect’ to the best of their abilities, but think forward and consider adopting new technologies to tackle these obstacles proficiently. 

Digital transformation and automation are not just megatrends shaking up the industry, it is the promise of the future. It is the means for businesses to become more sustainable and resilient to future challenges, even post-COVID-19. Digital and technology solutions with the use of AI can help the industry address these obstacles and hurdles. For instance, AI-powered Computer Vision technology is capable of ensuring safety compliance at all times, enhancing work productivity and improving cost efficiency through 24/7 monitoring and video and sensory analytics. It can also be incorporated with face recognition technology that enables contactless facial and temperature scanning for attendance-taking and safety purposes.

Now seems to be the best time to quickly make use of this opportunity to invest and exploit the potential of AI.

“Digital transformation will truly unlock for us the world as our hinterland and market. But that is if we make the right moves now, harness the power of digital to grow our businesses, drive our economic recovery, redefine our competitiveness and relevance to the world.”

Trade and Industry Minister Mr Chan Chun Sing

Have a chat with us to find out more about the added benefits of implementing computer vision. We can help you achieve the timeless competitive advantage of resilience and achieve sustainability in your construction business.