Why is Construction so Important to Singapore?

The most fundamental aspect of how a country is developed is the building industry. It’s the fundamental foundation of a nation as it represents the building blocks of a community. A country wouldn't have any homes, schools, hospitals, roads, ports, factories, etc. without its industry. A country's wealth and level of development are best represented by its infrastructure. Singapore has endured much hardship to get to where it is today.

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So, how important is the construction industry to Singapore?

Let's breakdown on the numbers.

In the year 2019, the Singapore construction sector contributes around 3.7% of the total GDP of Singapore (total Singapore nominal GDP, S$507 billion). 

Compared to other sectors, it may sound not so significant, isn’t it? The sector is just located in the bottom three of the lists. The proportion of construction GDP will change according to the development of the country. As Singapore is already a developed country, the economy will tend to shift to a higher value-added sector and construction contribution will reduce. However, it’s doesn’t say the construction is no longer important for the country. Let’s look at another perspective.

The total employment of Singapore is around 3.77 million of the labor force in the year 2019. Out of the total labor force, the construction sector has taken up 12.1% of the total labor force in the market which total up to around 456k people. So here is the point, only 3.7% of the GDP contribution sector has contributed a total of 12.1% Singapore employment. 

What does it mean? It means the construction industry creates a hell lot of job opportunities in the market! It's a job-creation engine. That number of forces, kicks starts the positive chain effect to other industries such as property, retail, banking, service sector and etc. It's the mother of everything. 

However, Singapore doesn't have enough population to support the construction and only relies on foreign forces. The foreign labor forces in the sector are outnumbered by local forces in the construction sector. There is a total of 75% of the labor force in this sector are foreigners, with only 25% left for locals.

Attracting and importing foreign labor and talents into this sector remain the crucial challenge since Singapore is just a tiny red dot and has a very limited population. Furthermore, most Singaporeans are highly educated, instead of working in the construction sector, they prefer to work in other sectors. That is why foreign talent is so vital for the development of Singapore, especially for this sector. We need foreign workers so that we can sell more flights, build more houses, sell more foods, sell more daily products, attract more foreign investment, loan more money and etc.

Despite the construction sector is not a high-value-added sector, it is no doubt one of the fundamental engines that drive the Singapore economy. It's the blood that moves the economy. This is why the construction industry is so important to Singapore.

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