SINGAPORE: Preliminary estimates by the Building and Construction Authority (BCA) announced on Thursday (Jan 11) showed that total construction contracts awarded in 2017 was S$24.5 billion, below the projected S$28 billion to S$35 billion for the year.
BCA said that last year’s total construction demand was lower than expected as there was a rescheduling of “a few major public sector infrastructure projects”, such as the North-South Corridor that is now slated for 2018.
There was also more time needed to prepare for large-scale and complex projects, BCA said.
It expects the value of construction contracts awarded in 2018 to be between S$26 billion and S$31 billion, a slight downward revision from an initial projected range of S$26 billion to S$35 billion.
BCA attributed this to the “continued drag from the significant slowdown in private sector construction demand since 2015”.
Total preliminary public sector construction demand in 2017 was S$15.5 billion.
This year's figure is expected to fall between S$16 billion and S$19 billion, contributing to about 60 per cent of 2018’s total projected demand, with jobs coming from an increase in demand for healthcare facilities, civil engineering works and a slew of smaller government projects that have been brought forward in response to the slowdown in previous years, among others.
The private sector’s construction demand is expected to improve from S$9 billion in 2017 to between S$10 billion and S$12 billion in 2018 due to a brighter economic outlook and upturn in the property market sentiment.
Some of the projects slated to be awarded this year include contracts for the North-South Corridor, and office building works at Central Boulevard and Harbour Drive.
MEDIUM TERM FORECAST
BCA said that it anticipates a “steady improvement” in the construction market in the medium term, with demand projected to reach between S$26 billion and $33 billion per annum for 2019 and 2020.
It is expected to pick up further in 2021 and 2022, and range between S$28 billion to S$35 billion.
The public sector will continue to lead demand and possibly contribute between S$16 billion to S$20 billion each year from 2019 to 2022. This, in light of major infrastructure projects such as the Cross Island Line and Changi Airport Terminal 5, BCA said.
Private sector construction demand will also gradually increase in the medium term due to redevelopment of en bloc sites and spill-over benefits generated by improved economic performance, the statutory board added.