Following continual weakening of the property and construction sector, Singapore’s Building and Construction Authority (BCA) announced yesterday (May 28) that the number of construction foreign workers will be reduced 30% in three years’ time by 2020.
According to a media interview with BCA Chief Executive John Keung, the move to reduce foreign labour will increase productivity will start with restricting of employment work passes for lower skilled foreign workers:
“The authority wants to slash the number of rank-and-file foreign construction workers here by 20 per cent to 30 per cent by 2020. This is part of its continuing efforts to “reshape” the sector’s workforce in line with a government push for greater productivity. We aim to do that – to cut it down by 20 to 30 per cent… Whoever is left… will be the higher-skilled workers.”
Currently, there are 300,000 foreign workers in the construction sector and about 60% of them are general workers with no qualifications. The BCA CEO said that the government wants to reduce their presence to only 40% of the total foreign construction workforce
Singapore’s productivity growth has been a disaster since the influx of foreign workers in 2006, declining as serious as 13% at one point in 2018. In the past 6 years, productivity growth has largely been in the negative region.
Singapore’s construction sector took a hit after property prices declined upon the government’s introduction of property cooling measures. The sector was hit further as a bulk of the China property investments in the region flows to Malaysia instead of Singapore because of political tensions over the South China Sea and Singapore’s refusal to comply the One-China policy.Earlier this month, at least half of Sentosa Cove private condominiums were sold at a loss, with one unit at a record S$6.6 million loss.
While the private property sector are crashing, the prices of the public HDB properties are also declining albeit at a controlled rate. The Singapore government controls the decline of HDB property prices by fixing newly-built BTO HDB apartments, through the covering up of construction costs. However, the move to manipulate market prices resulted in oversupply in the HDB BTO market with sales of balance flats reaching an all-time-high. Singaporean first-time home buyers are however not entering the BTO market due to unaffordable prices.