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BCA cuts 2020 forecast for projected construction demand by S$10b
THE Building and Construction Authority (BCA) on Thursday said it has reduced its forecast for this year's projected construction demand by S$10 billion from its earlier January forecast.
The new forecast of S$18 billion to S$23 billion, a fall from the previous S$28 billion to S$33 billion, comes after BCA's mid-year review of construction contracts awarded in the first half of 2020, and upcoming public and private-sector projects expected for the rest of the year.
This was attributed to reasons such as a drop in private-sector construction demand and postponements in the award of some public sector projects to next year, as contractors and suppliers have asked for more time to assess the impact of Covid-19 on resource management and project implementation timelines.
For the year, the forecast for construction demand in the public sector is estimated to be worth S$11 billion to S$14 billion in terms of value of contracts awarded, compared to last year's demand of S$19.03 billion.
As for demand in the private sector, the forecast stands at S$7 billion to S$9 billion, nearly half of last year's S$14.5 billion in demand.
However, BCA said demand is expected to recover to some extent from 2021, supported by public residential developments and upgrading works, developments at the Jurong Lake District, construction of new healthcare facilities and various infrastructure projects such as the construction of the Cross Island MRT Line.
"It is important that the construction industry remains vigilant to prevent a resurgence of Covid-19 cases, which could bring the sector to a halt again," said BCA in a statement.
It added that it will "continue to lean forward to provide assistance to the construction industry in various ways, including financial assistance to help firms tide through this very challenging period".
In a Facebook post on Thursday, Minister for National Development Desmond Lee said that following the novel coronavirus outbreak, the industry has since understood "the need to build up capability for sustainable business development" and "the role of technology and digitalisation to build up industry resilience".
Despite this year's dull outlook, the "silver lining" lies in the fact that demand will be expected to pick up to some extent next year, with a "pipeline of public sector projects coming on stream next year," he added.
BCA will provide an update on the projected construction demand for 2021 and 2022 in early 2021.