Construction sector struggles to innovate despite generous productivity incentives

Labour crunch still a key hurdle.

The construction sector struggles to automate in spite of generous research and development incentives from the government, a report by Macquarie revealed.

According to Macquarie, the labour crunch is still a key hurdle as the sector remains intensely dependent on the availability of cheap foreign labour.

“Construction investment is less productivity-enhancing – especially in Singapore, where the construction sector is very labour-intensive. The government has sought to provide incentives for R&D and greater automation in the construction sector – but the availability of cheap foreign labour has constrained automation within Singapore’s construction sector over the past 5 decades, and it will be very difficult for the sector to rapidly climb the productivity/automation ladder,” stated the report.