Impact of Delayed Major Construction Projects on Singapore Economy
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the inquiry by Mr Shawn Huang Wei Zhong regarding the economic impact of manpower shortages and project delays on the construction sector and Singapore’s broader economy. Minister for Trade and Industry Gan Kim Yong noted that while construction output was 25 per cent below pre-pandemic levels, the overall economy remained resilient and grew by 0.6 per cent. This growth was driven by outward-oriented sectors such as manufacturing and finance, which helped offset the delays and output dampening within the construction industry. To mitigate manpower constraints, the Government implemented measures to help firms retain existing staff and safely recruit new workers via a tightened end-to-end process. Minister for Trade and Industry Gan Kim Yong affirmed the Government's commitment to supporting firms in meeting the manpower requirements of all key ongoing projects.
Transcript
27 Mr Shawn Huang Wei Zhong asked the Minister for Trade and Industry (a) what is the economic impact on the construction industry due to the manpower shortage; and (b) what is the economic impact on Singapore’s economy due to the delay of major construction projects and respective mitigating measures.
Mr Gan Kim Yong: Manpower shortages in the construction sector have adversely affected the pace of construction activities and dampened output in the sector. In the first three quarters of 2021, the real value-added of the construction sector was 25 per cent below its pre-pandemic level in the same period of 2019.
Notwithstanding the resulting delays in construction projects, the overall economy has remained resilient. In the first three quarters of 2021, the real GDP of the Singapore economy had recovered to 0.6 per cent above its level in the same period of 2019, supported by the strong performance of outward-oriented sectors such as manufacturing, finance and insurance.
The Government recognises the challenges faced by the construction sector, and has implemented several measures to alleviate the tight manpower situation in the sector. These include making it easier for construction firms to retain their existing workers, and helping them to bring in new workers. Firms in the sector have also taken the lead to bring in more workers safely through a tightened end-to-end process. The Government remains committed to working with firms in the sector to meet the manpower needs of key ongoing projects.