DATA ENVELOPMENT ANALYSIS ON PUBLICLY LISTED CONSTRUCTION COMPANIES

Abstract

Productivity in the Singapore construction industry has been low, falling short of the expectations of the government. Despite the government’s constant efforts to increase the productivity of the construction industry and reduce reliance on unskilled foreign workers, they were not as successful as expected. This study aims to investigate the relative efficiency of a few selected publicly listed construction companies using a unique tool, Data Envelopment Analysis (DEA). The objective is to identify whether these selected few construction companies are being efficient among themselves. Using the annual report of the publicly listed selected construction companies, DEA is able to provide insight into their operations. By using selected values of inputs and output, the relative efficiency can be calculated. The selected companies are selected on the basis that construction is their core business. The result shows that there is an apparent difference amongst the companies when it comes to efficiency. Of the five selected construction companies, one is operating at a relatively low efficiency while two are relatively efficient for the Year 2010 and 2011. Given this outcome, an exploratory attempt is made in this dissertation to examine why this particular company may be less efficient. The main reason for the poor performance of that particular company is that too much resources and finances were put into their operation relative to output. On the other hand, the other two efficient firms did not put in too much resources and finances relative to output.