You are here

Singapore construction demand to remain strong in 2020 after hitting 5-year high last year

nz_construction_080155.jpg
Singapore construction demand is expected to remain strong this year after hitting a five-year high in 2019, said BCA. In 2014, demand was S$38.8 billion, also the highest ever.

SINGAPORE construction demand is expected to remain strong this year after hitting a five-year high in 2019, said the Building and Construction Authority (BCA). In 2014, demand was S$38.8 billion, also the highest ever.

Last year’s total construction demand expanded by 9.5 per cent to reach S$33.4 billion, about S$1.4 billion higher than the upper bound of BCA’s 2019 forecast of S$27 billion to S$32 billion, mainly due to a stronger than expected increase in industrial construction demand for petrochemical facilities, despite the slowdown in manufacturing sector. Total preliminary construction demand last year for the public and private sector was S$19 billion and S$14.4 billion respectively.

BCA projects total construction demand (value of construction contracts to be awarded) to remain strong in 2020 due to sustained public sector construction demand. The total construction demand is expected to range between S$28 billion and S$33 billion this year.

Public sector construction demand, which is expected to reach between S$17.5 billion and S$20.5 billion this year, will make up about 62 per cent of projected demand for this year. Public sector construction demand is expected to be spurred by major infrastructure projects, which are larger and more complex in scale, such as the Integrated Waste Management Facility, infrastructure works for Changi Airport Terminal 5, Jurong Region MRT Line and Cross Island MRT Line.

Private sector construction demand is projected to be between S$10.5 billion and S$12.5 billion this year, supported by projects such as redevelopment of en-bloc sale sites, recreational developments at Mandai Park, Changi Airport new taxiway, and berth facilities at Jurong Port and Tanjong Pagar Terminal. The forecast for 2020 excludes any construction contracts by the two integrated resorts (IRs) pending confirmation on the timeline and the phasing of the expansion projects.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

MEDIUM-TERM FORECAST FOR 2021 TO 2024

Construction demand is expected to hold steady over the medium term. Demand is projected to reach between S$27 billion and S$34 billion per year for 2021 and 2022, and between S$28 billion and S$35 billion per year for 2023 and 2024.

The public sector will continue to lead demand and is expected to contribute S$16 billion to S$20 billion per year from 2021 to 2024, with building projects and civil engineering works each taking up about half of the demand. Besides public residential developments, public sector construction demand over the medium term will continue to be supported by various mega infrastructure projects.

BCA expects private sector construction demand to stay at a moderate level in view of the likely continued global economic uncertainties and the current overhang in the supply of private residential housing units. Nonetheless, the planned expansion of the two IRs could provide further upside to private sector demand, depending on their eventual construction timelines and phasing.

CONSTRUCTION OUTPUT

Total nominal construction output in 2020 is projected to increase to between S$30 billion and S$32 billion, from the estimated S$28 billion in 2019. The anticipated further pick-up in total construction output in 2020 is supported by the improved construction demand since 2018, following the slowdown in 2015 to 2017.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes