S'pore construction sector expected to slow in 2012

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Following two years of a construction boom and the recent government measures to curb property prices, OCBC expects the pace of construction demand to slow next year, according to a report by Singapore Business Review.

However, OCBC noted that the slowdown will likely pick up from demand in the public housing sector, as the Housing & Development Board (HDB) plans to roll out more flats.

“For Build-To-Order (BTO) flats alone, around 25,000 units will be introduced into the market,” said OCBC.

”In addition, with the bearish global economic outlook, we believe the government is likely to increase infrastructure spending to help beef up domestic economic activities. As it stands, the government has already committed to big infrastructure projects such as the North South Expressway.”

While the drivers of construction demand will change, OCBC pointed out that the overall impact will not mean “a big drop in construction activities and prospects are in general still healthy.”

The Building and Construction Authority estimates between S$21 billion and S$28 billion of construction contracts will be up for grabs in 2012 and 2013.

“This implies that construction demand will moderate slightly as compared to 2011, but will still be robust. We believe there will be enough jobs in the coming two years, and therefore, remain positive on the sector,” said OCBC.

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