Commercial Project Renovations To Help Drive Construction Demand In 2021
SINGAPORE – The lion’s share of private sector construction demand this year is expected to consists of major retrofitting of existing commercial projects, redevelopment of remaining en bloc residential sites, and establishment of high-spec industrial buildings, according to a press release published by the Building and Construction Authority (BCA) on Monday (18 January).
Overall, the government agency projects that construction demand from the private sector would hover between S$8 billion and S$10 billion in 2021. “Construction demand decreased from S$14.5 billion in 2019 to S$8.1 billion in 2020, due to market uncertainties amid the COVID-induced economic recession,” explained the government agency.
Still, public sector construction demand is expected to account for the bulk of construction demand at S$15 billion and S$18 billion in 2021 due to the anticipated robust demand for public housing & infrastructure developments.
“Public sector construction demand dropped from S$19.0 billion in 2019 to S$13.2 billion in 2020, as some major infrastructure projects that required more time to assess the pandemic’s impact on resource management and project schedules, were postponed.”
Major projects in the public sector to be awarded in 2021 include various work packages under Jurong Region MRT Line, Phase I of the Cross Island MRT Line, and Phase II of the Deep Tunnel Sewerage System.
As such, Singapore’s combined construction demand for 2021 from the private and public sectors is forecasted to range from S$23 billion to S$28 billion, up from the S$21.3 billion initial estimate in 2020.
“Due to the impact of the COVID-19 pandemic, which disrupted project implementation schedules, the preliminary figure for construction demand in 2020 indicated a decline of 36.5 per cent to S$21.3 billion. This was within BCA’s revised forecast of S$18 billion to S$23 billion,” noted the BCA.
From 2022 to 2025, total construction demand is forecasted to hit S$25 billion to S$32 billion per annum. In particular, that for the private sector is projected to hit S$11 billion to S$14 billion per year.
“This is in anticipation of a gradual recovery of the global economy, contingent on the successful deployment and effectiveness of COVID-19 treatment and vaccines as well as easing of lockdown restrictions,” noted the government agency.
In comparison, the public sector is expected to account for S$14 billion to S$18 billion per annum from 2022 to 2025.
“Besides public residential developments, public sector construction demand over the said period will continue to be supported by large infrastructure and institutional projects such as the Cross Island MRT Line (Phases 2 and 3), the Downtown Line Extension to Sungei Kadut, the cycling path networks, the relocation of Singapore Science Centre, the Toa Payoh Integrated Development, the Alexandra Hospital redevelopment and a new integrated hospital at Bedok,” added the BCA.