Construction demand to reach $27 bil to $32 bil in 2023: BCA

BCA estimates the value of construction contracts awarded this year to be within the range of $27 billion to $32 billion, similar to what was projected for 2022. Public sector construction demand is expected to make up around 60% of total demand, representing between $16 billion and $19 billion, with demand supported by the supply of Build-to-Order flats, industrial and institutional buildings, MRT line construction and other infrastructure works. Private sector construction demand is projected to come in between $11 billion to $13 billion.

Construction demand in Singapore is slated to remain strong in 2023, with projections estimating the value of construction contracts awarded to lie within the range of $27 billion to $32 billion. According to the Building and Construction Authority (BCA), this is consistent with the demand witnessed in 2022, which totalled $29.8 billion based on preliminary figures, and 2021 where demand totalled $29.9 billion.

The public sector witnessed a slight improvement in demand from $17.8 billion in 2021 to $17.9 billion in 2022, with major projects such as the Cross Island MRT Line (Phase 1), Jurong Region MRT Line, and MOH healthcare facilities driving this demand.

Adversely, private sector construction demand moderated from $12.1 billion in 2021 to $11.9 billion in 2022, mostly due to various economic constraints. Nevertheless, demand for private residential and industrial building developments generally remained resilient.

Calculations for 2023 put public sector contracts at around 60% of total demand, translating to between $16 billion and $19 billion in value. Private sector construction demand is also expected to hover between $11 billion and $13 billion. Infrastructure projects such as water treatment plants, educational buildings and community clubs, MRT line construction, and Build-to-Order (BTO) flats by HDB will be the key drivers for public sector demand this year.

BCA also noted that total nominal construction output for 2023 is expected to increase to between $30 billion to $33 billion, with the overall figure slightly higher than the $30.2 billion recorded for 2022. This is attributed to a steady level of construction demand and some backlog of remaining workloads impacted by the Covid-19 crisis.

Looking ahead, total construction demand is forecasted to reach between $25 billion and $32 billion annually from 2024 to 2027, with $14 billion to $18 billion and $11 billion to $14 billion attributed to public and private sector demand respectively. The projections, however, do not include Changi Airport Terminal 5 and related developments, or expansions of two integrated resorts, owing to a lack of specific details such as timelines and construction phasing for Bukit Batok EC these projects.

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