When someone shares with you something of value, you have an obligation to share it with others.
Wednesday, 27 April 2016
Architects also hurting from real estate woes
The real estate downturn has filtered down to architecture
and engineering services firms, which were hit by surging redundancies last
year - and industry players warn that the situation could worsen this year.
The real estate downturn has filtered down to architecture and engineering services firms, which were hit by surging redundancies last year - and industry players warn that the situation could worsen this year.
It has been the larger architecture firms where rumours of retrenchment are rifest, though no firm has been willing to confirm this.
Last year's official jobs data is telling. Based on the Ministry of Manpower's labour report for 2015, the number of redundancies in the architecture and engineering services segment was 940 last year; the figure was 240 in 2013 and 350 in 2014. (Redundancies are those who are retrenched and those who are released early from their contracts.)
Of the 940 redundancies last year, about seven in 10 were PMETs, that is, professionals, managers, executives and technicians, and about 67 per cent were attributable to a "recession or downturn in the industry".
DP Architects, with the largest number of registered architects in Singapore, said that the firm did not hold a retrenchment exercise; its chief executive Angelene Chan told The Business Times that the firm decided against continuing to employ a handful of underperformers under its annual performance-review exercise.
"Our staff numbers have stayed relatively constant between this year and last year, averaging at 900," she said. "The change in the number of our staff is about 4 per cent, consistent with the normal yearly attrition through resignations and retirement for a firm of our size."
She added, however, that DP Architects has received an increase in the number of job applications from architects from other firms.
Aedas global board director Tony Ang, who is also managing director for Singapore, suggested that the industry could downsize if the economy does not improve. "The majority of architectural practices are having a hard time, the private sector is very cautious and there is a dearth of local private-sector projects," he said. "However, the Board of Architects and the Singapore Institute of Architects are working closely with the government to alleviate this situation."
Aedas hires more than 300 people in Singapore, and undertakes regional work ranging from master planning to commercial, residential and mixed-use developments and infrastructure. Mr Ang said that the firm was fortunate to have recently won a few projects in the region and locally.
Smaller architecture firms focusing on residential or smaller projects are finding it hard to secure government infrastructure projects, he said. As a ballpark estimate, there are more than 370 registered architecture firms here; more than half are small practices.
Small firms are potentially stuck between a rock and a hard place; there are not many smaller projects out there, and such firms are not big enough to tender for the large infrastructure or public projects, for which the larger firms with sufficient resources and capital typically bid.
Lim Choon Keang, managing principal and founder of a four-strong firm, CKLi:et Architects, noted that while the big boys are in a better position to bid for the large projects, technology is levelling the field. And in time to come, smaller firms may start teaming up on a project basis, he said.
Ling Shiang Yun, president of the Association of Consulting Engineers Singapore, told BT that there was no evidence yet to rumours of retrenchments in the engineering services sector. The association has 180 member firms that hire over 8,000 people.
He observed, however, that architecture firms are often the first to be hit by a slowdown in private-sector development projects, followed by engineers and contractors, because engineering firms are better able to shift their resources towards public infrastructure works when the government ramps up such projects.
Due to the tendering limits that the government imposes on firms based on their size and track record, however, large engineering firms are still the ones which benefit the most from government infrastructure projects, Mr Ling said.
With fewer projects from private developers, the focus has now shifted towards public construction projects. Industry players note that stiff competition for public projects is keeping a lid on bid prices, even though costs are rising due to tighter requirements under the government's Green Mark initiative, the use of Building Information Modelling (BIM), the use of productive technologies and the migration to Eurocodes, which are a new set of standards for the structural design of buildings and civil-engineering works.
Of late, an anomaly has emerged in the bidding patterns of large firms for public-infrastructure projects. Mr Ling noted that in recent government tenders, the larger engineering consultancy firms have been putting in the lowest bids, in a sign that even the Big Boys are now hungry for jobs.
The Singapore government has said in Budget 2016 that the ramp-up in public-sector construction projects - which will help mitigate the slide in private sector demand - includes more than S$2.5 billion in contracts for smaller projects, that is, those with construction value estimated at below S$100 million. But industry players seem unconvinced about how this would level the field for smaller firms.
Meanwhile, architecture firms have wasted no time in their efforts to diversify their businesses and geographical exposure.
Ms Chan, noting that the coming years would be challenging for the architecture and construction industry in Singapore and in Asia, said that DP Architects' revenue mix was expected to shift towards overseas markets by 20 per cent more, up from the current 50 per cent.
"We see Middle East as the bright spot now, with upcoming residential, commercial and master-planning projects in Turkey and Qatar, especially with Qatar ramping up its development to host the World Cup in 2022. We are opening an office in Istanbul later this year to better serve our clients in that region and to tap emerging opportunities in the region," she added.
DP Architects has deepened its vertical integration of architecture and related services with the addition of a lighting design subsidiary, and is strengthening its engineering, sustainable design and landscape services. "We are also adding more experts to our company in the field of healthcare, infrastructure, interior design and master planning as we have seen an increase in demand for these services," Ms Chan said.
Aedas, which derives 60 per cent of its revenue locally and 40 per cent overseas, is looking for opportunities in China's "One Belt One Road" initiative and has sent its architects to major Asian cities to clinch new projects.
Mr Ang said: "But the competition is very tough due to our local overheads, the strength of our Singapore dollar and the risks of working overseas, where the rule of law is not as clear and transparent as here at home."
2 comments:
Architects also hurting from real estate woes
Lynette Khoo
21 April 2016
The real estate downturn has filtered down to architecture and engineering services firms, which were hit by surging redundancies last year - and industry players warn that the situation could worsen this year.
It has been the larger architecture firms where rumours of retrenchment are rifest, though no firm has been willing to confirm this.
Last year's official jobs data is telling. Based on the Ministry of Manpower's labour report for 2015, the number of redundancies in the architecture and engineering services segment was 940 last year; the figure was 240 in 2013 and 350 in 2014. (Redundancies are those who are retrenched and those who are released early from their contracts.)
Of the 940 redundancies last year, about seven in 10 were PMETs, that is, professionals, managers, executives and technicians, and about 67 per cent were attributable to a "recession or downturn in the industry".
DP Architects, with the largest number of registered architects in Singapore, said that the firm did not hold a retrenchment exercise; its chief executive Angelene Chan told The Business Times that the firm decided against continuing to employ a handful of underperformers under its annual performance-review exercise.
"Our staff numbers have stayed relatively constant between this year and last year, averaging at 900," she said. "The change in the number of our staff is about 4 per cent, consistent with the normal yearly attrition through resignations and retirement for a firm of our size."
She added, however, that DP Architects has received an increase in the number of job applications from architects from other firms.
Aedas global board director Tony Ang, who is also managing director for Singapore, suggested that the industry could downsize if the economy does not improve. "The majority of architectural practices are having a hard time, the private sector is very cautious and there is a dearth of local private-sector projects," he said. "However, the Board of Architects and the Singapore Institute of Architects are working closely with the government to alleviate this situation."
Aedas hires more than 300 people in Singapore, and undertakes regional work ranging from master planning to commercial, residential and mixed-use developments and infrastructure. Mr Ang said that the firm was fortunate to have recently won a few projects in the region and locally.
Smaller architecture firms focusing on residential or smaller projects are finding it hard to secure government infrastructure projects, he said. As a ballpark estimate, there are more than 370 registered architecture firms here; more than half are small practices.
Small firms are potentially stuck between a rock and a hard place; there are not many smaller projects out there, and such firms are not big enough to tender for the large infrastructure or public projects, for which the larger firms with sufficient resources and capital typically bid.
Lim Choon Keang, managing principal and founder of a four-strong firm, CKLi:et Architects, noted that while the big boys are in a better position to bid for the large projects, technology is levelling the field. And in time to come, smaller firms may start teaming up on a project basis, he said.
Ling Shiang Yun, president of the Association of Consulting Engineers Singapore, told BT that there was no evidence yet to rumours of retrenchments in the engineering services sector. The association has 180 member firms that hire over 8,000 people.
He observed, however, that architecture firms are often the first to be hit by a slowdown in private-sector development projects, followed by engineers and contractors, because engineering firms are better able to shift their resources towards public infrastructure works when the government ramps up such projects.
Due to the tendering limits that the government imposes on firms based on their size and track record, however, large engineering firms are still the ones which benefit the most from government infrastructure projects, Mr Ling said.
With fewer projects from private developers, the focus has now shifted towards public construction projects. Industry players note that stiff competition for public projects is keeping a lid on bid prices, even though costs are rising due to tighter requirements under the government's Green Mark initiative, the use of Building Information Modelling (BIM), the use of productive technologies and the migration to Eurocodes, which are a new set of standards for the structural design of buildings and civil-engineering works.
Of late, an anomaly has emerged in the bidding patterns of large firms for public-infrastructure projects. Mr Ling noted that in recent government tenders, the larger engineering consultancy firms have been putting in the lowest bids, in a sign that even the Big Boys are now hungry for jobs.
The Singapore government has said in Budget 2016 that the ramp-up in public-sector construction projects - which will help mitigate the slide in private sector demand - includes more than S$2.5 billion in contracts for smaller projects, that is, those with construction value estimated at below S$100 million. But industry players seem unconvinced about how this would level the field for smaller firms.
Meanwhile, architecture firms have wasted no time in their efforts to diversify their businesses and geographical exposure.
Ms Chan, noting that the coming years would be challenging for the architecture and construction industry in Singapore and in Asia, said that DP Architects' revenue mix was expected to shift towards overseas markets by 20 per cent more, up from the current 50 per cent.
"We see Middle East as the bright spot now, with upcoming residential, commercial and master-planning projects in Turkey and Qatar, especially with Qatar ramping up its development to host the World Cup in 2022. We are opening an office in Istanbul later this year to better serve our clients in that region and to tap emerging opportunities in the region," she added.
DP Architects has deepened its vertical integration of architecture and related services with the addition of a lighting design subsidiary, and is strengthening its engineering, sustainable design and landscape services. "We are also adding more experts to our company in the field of healthcare, infrastructure, interior design and master planning as we have seen an increase in demand for these services," Ms Chan said.
Aedas, which derives 60 per cent of its revenue locally and 40 per cent overseas, is looking for opportunities in China's "One Belt One Road" initiative and has sent its architects to major Asian cities to clinch new projects.
Mr Ang said: "But the competition is very tough due to our local overheads, the strength of our Singapore dollar and the risks of working overseas, where the rule of law is not as clear and transparent as here at home."
Post a Comment