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Up to S$34b in construction contracts expected to be awarded this year

The Building and Construction Authority says the public sector is expected to drive about 65 per cent of the overall demand, making it the highest proportion from the sector since 2002.  

SINGAPORE: The amount of construction contracts to be awarded in 2016 is expected to be between S$27 billion and S$34 billion, with the public sector to drive about 65 per cent of this demand, the Building and Construction Authority (BCA) said at an industry conference on Friday (Jan 15). 

It added that should the forecast estimates be met, this will be the highest proportion of construction demand from the public sector since 2002. The total construction demand for 2015 was approximately S$27.2 billion, with public sector accounting for "slightly more than half of the demand", the agency said in its press release. 

Total construction demand fell short of the agency's estimates for last year - S$29 billion to S$36 billion - due to the "rescheduling of a few major public infrastructure contracts" such as MRT projects from the fourth quarter last year to early this year, it said. 

That said, total construction output, or progress payments made for work done in 2015, "remained high" at about S$35 billion. This was due to the "strong construction demand" in the preceding two years and contributed to about 4.7 per cent of Gross Domestic Product (GDP) last year, said BCA.


The agency also forecast that demand from the private sector will slow down this year from previous years due to "less favourable economic conditions and an increased supply of completed private housing projects and offices".

From the public sector, there would be higher demand due to projects such as the ramp-up in the Home Improvement Programme for HDB flats, the construction of the new National Cancer Centre, Changi Airport's three-runway system and the State Courts' new building at Havelock Square, it added. 

"BCA expects the total construction output this year to moderate to between S$32 billion and S$34 billion, partly due to the lower construction demand last year," it said.


As for its projections between 2017 and 2020, BCA said the average construction demand is expected to remain between S$26 billion and S$35 billion in 2017 and 2018, and between S$26 billion and S$37 billion in 2019 and 2020.

Public sector construction demand is estimated to be between S$16 billion and S$20 billion annually from 2017 to 2020, with about 60 per cent of this coming from building projects and the remaining from civil engineering ones, it added.

"Civil engineering construction demand is expected to remain strong beyond 2016 due to major infrastructure works including the construction of new MRT lines, the North-South Expressway, associated infrastructure works for Changi Airport Terminal 5 and phase 2 of the Deep Tunnel Sewerage System," the agency said. 

Speaking at the conference on Friday, Senior Minister of State for National Development Desmond Lee said that while private sector construction demand has slowed, Singapore has a strong pipeline of public sector projects, all of which are needed for Singapore’s long-term needs.