Singapore’s total construction demand to remain strong this year

The Building and Construction Authority (BCA) projects the total construction demand, i.e. the value of construction contracts to be awarded, in 2019 to range between SGD27 billion and SGD32 billion, comparable to the SGD30.5 billion (preliminary estimate) awarded in 2018.

The projected outlook is due to sustained public sector construction demand, which is expected to reach between SGD16.5 billion and SGD19.5 billion in 2019, contributing to about 60 per cent of the projected demand for this year. Public construction demand is expected to be boosted by major infrastructure projects and a pipeline of major industrial building projects.

The private sector’s construction demand is expected to remain steady at between SGD10.5 billion and SGD12.5 billion in 2019, supported by projects including the redevelopment of past en-bloc sales sites concluded prior to the second half of 2018 and new industrial developments.

Last year’s total construction demand was within forecast due to strong demand from institutional building and civil engineering projects, continued positive growth in the manufacturing sector and more private residential redevelopment projects from en-bloc sales in 2017 and the first half of 2018. Total preliminary construction demand last year for the public and private sector was SGD18.4 billion and SGD12.1 billion respectively.

BCA expects a steady improvement in construction demand over the medium term. Demand is projected to reach between SGD27 billion and SGD34 billion per year for 2020 and 2021 and could increase to between SGD28 billion and SGD35 billion per year for 2022 and 2023.

The public sector is expected to contribute SGD16 billion to SGD20 billion per year from 2020 to 2023 with similar proportions of demand coming from building projects and civil engineering works. Besides public residential developments, public sector construction demand over the medium term will continue to be supported by big infrastructure projects such as the Cross Island Line, developments at Jurong Lake District and Changi Airport Terminal 5.

BCA also expects private sector construction demand to gradually increase in the medium term, boosted by further growth in the other economic sectors.

Based on the contracts awarded in the past few years and the construction demand forecast for 2019, total nominal construction output in 2019 is projected to increase to between SGD28 billion and SGD30 billion, compared to the estimated SGD27 billion in 2018. This is supported by the improved construction demand in 2018 following the 2015-2017 slowdown. — Construction+ Online