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

Construction demand in Singapore is expected to remain strong in 2023, according to a press release from the Building and Construction Authority (BCA). The value of construction contracts awarded this year is projected to be similar to last year’s figure, which totalled between $27 billion to $32 billion.

In 2022, total construction demand was $29.8 billion, which is within BCA’s forecast range and is on par with the $29.9 billion recorded in 2021. Elevated levels of residential and infrastructure projects in both public and private sectors supported this demand. Private sector construction demand moderated to $11.9 billion in 2020, due to “various economic downside risks”.

Public sector projects driving construction demand in 2023 are expected to make up 60% of the total Tengah EC and encompass a range of works such as the Cross Island MRT Line (Phase 1), the Ministry of Health’s (MOH) healthcare facilities, new Build-To-Order (BTO) units, water treatment plants, educational buildings and community clubs.

Private sector demand is anticipated to come close to last year’s level as residential and industrial building works as well as commercial building developments continue. The rescheduling of some projects from 2022 to 2023, coupled with the redevelopment of old commercial assets, is expected to propel commercial building demand.

Total nominal construction output, which is based on the value of certified progress payments, is projected to increase to between $30 billion to $33 billion in 2023. This is slightly higher than the $30.2 billion registered for 2022 and is attributed to a steady level of construction demand and a backlog of remaining workloads impacted by the Covid-19 outbreak since 2020.

Looking to the medium term, a range of $25 billion to $32 billion is projected for construction demand from 2024 to 2027. This includes an estimate of $14 billion to $18 billion for public sector construction works and $11 billion to $14 billion for private sector works. Not included in this is the Changi Airport Terminal 5 development and the expansion of two integrated resorts due to the unavailability of confirmed details.