With the rescheduling of “a few major public sector infrastructure projects”, total construction contracts awarded last year fell below expectations at $24.5 billion, reported Channel News Asia citing preliminary estimates from the Building and Construction Authority (BCA).
The value of construction contracts to be awarded in 2018 is expected to stand at $26 billion to $31 billion, a downward revision from the initial forecast of between $26 billion and $35 billion.
The downward revision was attributed by BCA to the “continued drag from the significant slowdown in private sector construction demand since 2015”.
Nonetheless, BCA expects private sector’s construction demand to increase from last year’s $9 billion to between $10 billion and $12 billion this year, on the back of a brighter economic outlook as well as improved property market sentiment.
Public sector construction demand is also expected to rise from $15.5 billion in 2017 to between $16 billion and $19 billion in 2018.
Looking ahead, BCA sees the construction market improving steadily in the medium term, with demand forecasted to reach $26 billion to $33 billion per annum in 2019 and 2020.
It expects demand to improve further in 2021 and 2022 at between $28 billion and $35 billion.
Taking the lead, the public sector is predicted to contribute $16 billion to $20 billion per year from 2019 to 2022 in view of the major infrastructure projects expected such as the Changi Airport Terminal 5 and Cross Island Line.
BCA expects private sector construction demand to gradually increase also in the medium term due to the spill-over benefits generated by the city-state’s improved economic performance and the redevelopment of collective sale sites.
This article was edited by Keshia Faculin.