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In 2021, the preliminary total construction demand increased by 42 percent 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 from the aftermath impact of COVID-19. The demand in 2021 was about 7 per cent higher than the upper bound of BCA’s earlier forecast of S$23 billion to S$28 billion, which was mainly attributed to the increase in tender prices resulting from manpower and materials cost inflation.

With a positive outlook for growth in the future, the Building and Construction Authority (BCA) estimated the total construction demand in 2022 to be between S$27 – S$32 billion, with the public sector expected to contribute about 60 per cent of the total construction demand. This is supported by the strong pipeline of public housing projects such as the Home Improvement Programme and BTOs, as well as healthcare developments and infrastructure works such as the Phase 1 of Cross Island MRT Line. Construction output is projected to increase due to a steady level of construction demand and the backlog of remaining workloads that were affected by the COVID-19 pandemic since 2020.

The increase in demand will largely come from the private sector, with the construction demand to be anticipated to reach between S$11 billion and S$13 billion in 2022. Given the latest property cooling measures, residential building demand is anticipated to moderate year-on-year amid more cautious market sentiments. However, commercial building demand is expected to increase as hotels and attractions undergo refurbishment to prepare for inbound tourism revival, and older commercial premises are earmarked for redevelopment to enhance their asset values. In addition, the private sector industrial building demand is expected to see some support from the construction of energy storage facilities and biopharmaceutical manufacturing plants.

 

Forecast for 2023 to 2026

Over the medium-term, BCA expects the total construction demand to reach between S$25 billion and S$32 billion per year from 2023 to 2026. About half of the demand from the public sector will come from building projects and the other half from civil engineering works. MRT projects including the Cross Island Line (Phases 2 & 3) and its Punggol Extension and the Downtown Line Extension to Sungei Kadut, the Toa Payoh Integrated Development, redevelopment of Alexandra hospital and a new integrated hospital at Bedok will also be part of the various major developments in the pipeline. With Singapore’s strong economic fundamentals, private sector construction demand is projected to remain steady over the medium-term to about S$11 billion to S$14 billion per year from 2023 to 2026.

 

In 2022, Singapore will be in the “time of transition” as the economy steadily recovers with Singapore gradually reopening and reconnecting with the rest of the world. Industry such as Tourism and Hospitality and Construction sector will generate great economic growth for the nation. The Government will continue to work closely with the industry to provide support to accelerate economic recovery.

 

For more information, refer to the following link:

Sustained Construction Demand in 2022 supported by Public Sector Projects (bca.gov.sg)

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