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Public works, en bloc projects to fuel S$26b-S$31b of construction demand in 2018: BCA
THE BUILDING and Construction Authority (BCA) on Thursday projected that S$26 billion to S$31 billion in construction contracts could be awarded in 2018, up from the S$24.5 billion estimated to have been awarded in 2017.
The projected higher construction demand is due to an anticipated increase in public sector work, which is expected to grow from S$15.5 billion in 2017 to between S$16 billion and S$19 billion this year.
This contributes to about three-fifths of 2018's total projected demand. But the remainder, coming from the private sector, is also expected to be an improvement, from S$9 billion in 2017 to between S$10 billion and S$12 billion in 2018. The growth will come on the back of a stronger economic outlook and upturn in property market sentiment, BCA said.
BCA also explained that last year's total construction demand was slightly lower than expected because a few major public-sector infrastructure projects - such as the North-South corridor - were rescheduled to 2018 amid longer preparation times required for complex, large-scale projects.
In his opening address, Desmond Lee, Second Minister for National Development, noted that Singapore's overall GDP growth is expected to come in at 3.5 per cent for 2017, which is at the high end of initial forecasts, and sentiment in the private property market seems to be improving.
"BCA projects that construction demand for private residential projects could be up to S$3.6 billion this year. Some of this will be generated by the spate of en-bloc sales which will also lead to increased supply of new private housing units over the next few years."
He added that even in the private commercial property space, demand for such projects could hit S$2.5 billion this year, backed by upcoming office developments projects at Central Boulevard and Harbour Drive.
The agency anticipates that in the medium term, construction demand will reach S$26 billion to S$33 billion per year for 2019 and 2020, and S$28 billion to S$35 billion per year for 2021 and 2022.
As has been the case in previous years, the public sector is likely to lead demand and contribute S$16 billion to S$20 billion per year from 2019 to 2022, with a somewhat equal split between building projects and civil engineering works, it added.