Title: The impact of oil price fluctuation on the Singapore construction industry

Authors: Bon-Gang Hwang; Yessy Ong

Addresses: Department of Building, School of Design and Environment, National University of Singapore, 4 Architecture Drive, 117566, Singapore ' Rider Levett Bucknall LLP, 150 Beach Road, #09-01, Gateway West, 189720, Singapore

Abstract: As oil is a fundamental element in human activities, its price fluctuation affects many industries, including the building construction industry in Singapore. During the months of high oil prices in 2008, the increase might be absorbed and transferred from one player to another, and resulted in higher construction costs in Singapore. Based on the perspectives of different project players such as developers, suppliers, consultants, and contractors, this study first aims to investigate how oil price hike affects the Singapore construction industry. Also, some strategies for coping with future oil price hike are proposed in this study. The results from this study revealed that oil price fluctuation can affect project key players differently and has greater impact on buildings with steel structure systems and basement. To stay competitive under oil price hike, companies should be efficient in carrying out their construction processes. By understanding various impacts from oil price hike, the industry can optimise construction costs and achieve higher profit margins, ultimately increasing their resilience in harsh times.

Keywords: oil prices; construction cost; construction materials; construction equipment; construction project management; construction industry; Singapore; oil price fluctuation.

DOI: 10.1504/IJPOM.2013.055854

International Journal of Project Organisation and Management, 2013 Vol.5 No.3, pp.265 - 278

Received: 25 Jan 2011
Accepted: 17 Apr 2011
Published online: 31 Jan 2014 *

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