Singapore Construction Demand Reduces by $10 Bilion in 2020
The Building and Construction Authority (BCA) projects the total construction demand (value of construction contracts to be awarded) to remain strong in 2020 with 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 S$17.5 billion and S$20.5 billion this year, will make up about 60% of the 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.
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 Integrated Resorts could provide further upside to private sector demand, depending on their eventual construction timelines and phasing.
Construction Demand Slash in Year 2020
The construction sector is expected to bring in $ 10 billion this year as public sector projects are pushed back and demand for private sector projects falls sharply. The projected construction demand for 2020 was revised to 18 to 23 billion US dollars after a mid-year review, the Building and Construction Agency (BCA) announced on Thursday (September 17). This is a significant decrease from BCA’s January guidance from $ 28 billion to $ 33 billion for the year.
The downward revision is mainly due to a decline in private construction demand. Some public sector projects have also been postponed from this year to next year as contractors and suppliers asked for more time to assess the impact of Covid-19.
| Value of contracts awarded (S$ billion) | |||
| Year | Public | Private | Total |
| 2019 | 19.03 | 14.5 | 33.52* |
| 2020 (forecast) | 11-14 | 7-9 | 18-23 |
The construction industry has realised that disruptions like COVID-19 can have serious impact on business and understands the need to build up capability for sustainable business development. BCA will be providing an update on the projected construction demand for 2021 and 2022 in early next year.
