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Construction demand to plunge this year after COVID-19 stalls projects

Construction demand to plunge this year after COVID-19 stalls projects

Migrant workers work at a construction site in Singapore on Aug 20, 2020. (Photo: AFP/Roslan RAHMAN)

SINGAPORE: Construction demand this year is expected to plunge by billions of dollars, after COVID-19 battered the industry and brought projects to a standstill.

The Building and Construction Authority (BCA) on Thursday (Sep 17) said it has revised its projected construction demand to between S$18 billion and S$23 billion for the year, down from its January forecast of S$28 billion to S$33 billion.

Last year, the sector logged S$33.52 billion worth of contracts.

READ: COVID-19 - Construction projects could be delayed months, as contractors fear manpower crunch when clearing backlog


The downward revision comes after a drop in private sector construction demand and the awarding of some public sector projects were postponed from this year to next, said BCA.

"Contractors and suppliers (had) asked for more time to assess the impact of COVID-19 on resource management and project implementation timelines," said BCA.

This year, the public sector is expected to account for between S$11 billion and S$14 billion of all construction contracts, down from the S$19.03 billion logged last year, said BCA in its projections.

Private sector construction is forecast to garner S$7 billion to S$9 billion in contracts, down from the S$14.5 billion reported in 2019.

READ: Home owners can expect further renovation delays after circuit breaker as contractors face labour, supply shortage

The construction sector has been badly hit by COVID-19 and the measures put in place to stem the pandemic.

Singapore imposed a "circuit breaker period" on Apr 7 to stem the spread of COVID-19, shuttering all non-essential businesses. It exited the circuit breaker on Jun 1 and entered Phase 2 of its reopening on Jun 19.

During the circuit breaker, construction came to a standstill as well, affecting the timeline of projects and raw materials.

After projects gradually resumed in Phase 1 of the reopening, labour shortage among the migrant worker population continued to be a challenge.

READ: 62,000 workers still to have mandatory COVID-19 test scheduled ahead of deadline

READ: Government to help construction sector restart 'safely and smoothly', minimise delays for BTO flats: Desmond Lee

BCA said that construction demand is expected to recover "to some extent" from next year, partly due to public residential developments and upgrading works.

The agency highlighted the development of Jurong Lake District, construction of new healthcare facilities, and infrastructure projects such as the Cross Island Line.

READ: Punggol extension on Cross Island Line to begin construction in 2022

In a Facebook post on Thursday, National Development Minister Desmond Lee noted the impact of COVID-19 on the "construction process and timeline" and the challenges industry players face.

"In spite of the restart, the industry still faces challenges," said Mr Lee.

"The silver lining is that we expect demand to pick up to some extent next year, and there will be a pipeline of public sector projects coming on stream next year," he said.

He added that BCA and other agencies will continue to provide assistance, including financial assistance, to the industry.

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Source: CNA/dv


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