BCA also expects the construction demand to be steady during the medium term. Demand is seen to reach $35 billion by 2024.
Last year’s total construction demand expanded by 9.5% to reach S$33.4 billion, about S$1.4 billion higher than the upper bound of BCA’s 2019 forecast of S$27 billion to $32 billion, mainly due to a stronger than expected increase in industrial construction demand for petrochemical facilities despite the slowdown in the manufacturing sector
The Building and Construction Authority (BCA) expects the total construction demand (which is the value of construction contracts to be awarded) to remain high in 2020 buoyed by demand for public sector construction.
The total construction demand is estimated to be around S$28 billion to S$33 billion this year, according to BCA’s recent news release. Public sector construction demand will take up around 60% of the expected demand in 2020, while also being projected to record $17.5 billion to $20.5 billion this year.
Major infrastructure projects such as the Integrated Waste Management Facility, infrastructure works for Jurong Region MRT Line and Changi Airport Terminal 5, are expected by the authority to push public sector construction demand.
Meanwhile, private sector construction demand is estimated by the BCA to reach between $10.5 billion and $12.5 billion in 2020, with the support of projects such as the construction of Changi Airport new taxiway and berth facilities at both Jurong Port and Tanjong Pagar Terminal, as well as the redevelopment of en-bloc sale sites.
The total construction demand in 2019 grew by 9.5% to record S$33.4 billion, mainly because of a stronger than anticipated increase in industrial construction demand for petrochemical facilities despite the manufacturing sector’s slowdown.
Total preliminary construction demand in 2019 for the private and public sectors stood at $14.4 billion and $19 billion respectively.
BCA: Construction demand to remain steady till 2024
BCA also expects the construction demand to be steady during the medium term. Demand is seen to reach $27 billion to $34 billion per year for 2021 and 2022, and from $28 billion to $35 billion each year for 2023 and 2024.
The public sector will still generate the highest demand and is seen to give $16 billion to $20 billion annually from 2021 to 2024, with civil engineering works and building projects eating up 50% of the demand.
Along with public residential developments, public sector construction demand during the medium term will be supported by many mega infrastructure projects. BCA also projects the private sector construction demand to be moderate due to the current property overhang issue and ongoing global economic uncertainties.
Total nominal construction output for 2020 is seen to grow anywhere from $30 billion to $32 billion, compared to the projected $28 billion in 2019. The projected growth is supported by the increase in construction demand since 2018.
With the positive projection in the medium term, Minister of State for National Development and Manpower, Zaqy Mohamad, urged the industry to go on investing in a competent and skilled local workforce who will guide the built environment sector into the future.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org