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Singapore

Public sector expected to contribute about 60% of total construction demand in 2022: BCA

03:05 Min
Construction demand in Singapore this year is projected to be between S$27 billion and S$32 billion, with the public sector expected to contribute about 60 per cent of the total demand, said the Building and Construction Authority (BCA) on Wednesday (Jan 26). Rebecca Metteo reports. 

SINGAPORE: Construction demand in Singapore this year is projected to be between S$27 billion and S$32 billion, with the public sector expected to contribute about 60 per cent of the total demand, said the Building and Construction Authority (BCA) on Wednesday (Jan 26).

Construction demand in the public sector is projected to be between S$16 billion and S$19 billion, it said.

"This is supported by the strong pipeline of housing projects including those under the Home Improvement Programme, as well as healthcare developments and infrastructure works such as the Cross Island MRT Line (Phase 1)." 

Meanwhile, the private sector construction demand is expected to reach between S$11 billion and S$13 billion this year, comparable with the volume in 2021.

"Given the latest property cooling measures, residential building demand is anticipated to moderate year-on-year amid more cautious market sentiments," said BCA. 

However, commercial building demand is expected to increase, as hotels and attractions undergo refurbishment to prepare for inbound tourism travel. Older commercial premises are also earmarked for redevelopment to enhance their asset values. 

In addition, the industrial building demand in the private sector is expected to see some support from the construction of energy storage facilities and biopharmaceutical manufacturing plants. 

PRELIMINARY TOTAL CONSTRUCTION DEMAND IN 2021 ROSE 42 PER CENT

The preliminary total construction demand for 2021 increased by 42 per cent to about S$30 billion compared to 2020. This was largely driven by public housing and infrastructure projects, as well as an improvement in investment sentiments, said BCA. 

This figure was about 7 per cent higher than the upper bound of BCA's earlier forecast of S$23 billion to S$28 billion, mainly due to an increase in tender prices resulting from manpower and materials cost inflation. 

The public sector construction demand rose from S$12.2 billion in 2020 to S$18.2 billion in 2021, underpinned by major projects such as the Cross Island Line, the Jurong Region Line, the Tuas Water Reclamation Plant and new Build-To-Order units. 

Construction demand in the private sector also rose from S$8.9 billion in 2020 to S$11.8 billion in 2021, supported by higher demand for residential, commercial and industrial building developments as the economy recovers. 

 

FORECAST FOR 2023 TO 2026

Over the medium-term, BCA said it expects the total construction demand to reach between S$25 billion and S$32 billion per year from 2023 to 2026. 

The projection excludes the Changi Airport Terminal 5 development and its associated infrastructure projects, as well as the expansion of the two Integrated Resorts. This is due to the uncertainty of the COVID-19 pandemic that could affect the construction schedules. 

The public sector is expected to lead the demand, contributing S$14 billion to S$18 billion per year from 2023 to 2026, said BCA. About half of the demand will come from building projects and the other half from civil engineering works, it added.

Besides public housing developments, there are also various major developments in the pipeline.

Developments include MRT projects such as Phases 2 and 3 of the Cross Island Line, its Punggol Extension and the Downtown Lines Extension to Sungei Kadut. There is also the Toa Payoh Integrated Development, redevelopment of Alexandra Hospital and a new integrated hospital in Bedok. 

"The private sector construction demand is projected to remain steady over the medium-term, reaching about S$11 billion to S$14 billion per year from 2023 to 2026, in view of a healthy investment appetite amid Singapore’s strong economic fundamentals," said BCA.

The total nominal construction output, or value of certified progress payments, is projected to increase to S$29 billion to S$32 billion for 2022, it added. This is from the preliminary estimate of about S$26 billion for 2021. 

This is due to a steady level of construction demand and the backlog of remaining workloads that were affected by the pandemic since 2020, said the authority. 

Editor’s note: This article has been amended following clarifications made by BCA in an updated press release, as well as to correct an error about the total construction demand for 2021.

Source: CNA/lk(ta)

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