Weathering the Storm: Job Support Scheme or Public Contracts

The construction industry is still in crisis, even as the rest of the world seems to be beginning to heal from the worst of the COVID-19 pandemic. In Q4 2020, the Built Environment sector in Singapore contracted by 27.4%, after a much more drastic 52.5% contraction in the preceding quarter. Bankruptcy is proliferating and productivity remains low as both public and private sector spending have ground to a halt.

But what is the best way to help the sector recover–capacity development or actual business? The Singaporean Government is hedging its bets by pursuing both.

With the Budget 2021 released by the Singapore Government in February, the Government elected to extend the Job Support Scheme first released in February 2020 for an additional three months to support the beleaguered construction industry. This support will allow construction industry firms to cover up to 10% of wages paid between April and June 2021. This comes after reduced levies on foreign workers that came into effect in April last year.

Simultaneously, the Government unveiled co-funding support for the salaries of Safety Management Officers (SMOs) in the Built Environment sector (until February 2021), allowing firms to upgrade how they manage their work in this pandemic. This is apart from the newly launched Growth & Transformation Scheme (GTS) in the Budget 2021, which is aimed at allowing the industry to take advantage of this crisis to upgrade their skills, digitalise processes, and enhance productivity across the entire construction industry value chain.

While this has allowed firms to retain labour and talent, it has often meant that firms have workers but no work–with workers left lying around for months on end. To this end, the Government has also sought to spur economic spirits through government spending.

According to the Building & Construction Authority (BCA), another front that the government is pursuing is to actively buoy activity in the Built Environment sector through public sector demand and government contracts. In 2021, the BCA projects that government demand will constitute 65% of Built Environment activity, or between $15 billion and $18 billion. The Government will roll out new public housing, infrastructure, and transportation projects to stimulate the construction sector, but is yet to release details on similar stimulus for private sector construction demand (for landed properties, offices etc.). One risk of this is that when the Government contract taps begin to dry out, private sector demand may still be too depressed to sustain a longer term recovery in the Singaporean building industry.

The question remains open: should the Government focus on capacity development and worker retention or focus on plain, old-fashioned fiscal stimulus to help the industry through this crisis? Or is the current hybrid of both working best?

Share this page!
This site uses cookies for your best user experience. By continuing to browse this site, you agree to our Cookie Policy at