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

/ EdgeProp Singapore |

January 15, 2023 8:03 PM SGT

Construction demand in 2022 totalled $29.8 billion, based on preliminary figures(Picture: Albert Chua/The Edge Singapore)

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SINGAPORE (EDGEPROP) The Building and Construction Authority (BCA) expects construction demand to "remain strong" in 2023. In a press release, it projects the value of construction contracts awarded this year to clock in between $27 billion to $32 billion, similar to last year's projection.

BCA also highlights construction demand in 2022 totalled $29.8 billion, based on preliminary figures. The amount is within BCA’s 2022 forecast range of $27 billion to $32 billion and is on par with the $29.9 billion recorded in 2021. The sustained level of demand was primarily supported by residential and infrastructure projects in both public and private sectors.

Public sector construction demand totalled $17.9 billion last year, improving slightly from the $17.8 billion recorded in 2021. Demand was underpinned by major projects such as the Cross Island MRT Line (Phase 1), Jurong Region MRT Line, the Ministry of Health’s (MOH) healthcare facilities and new Build-To-Order (BTO) units.

Private sector construction demand moderated from $12.1 billion in 2021 to $11.9 billion in 2022 amid “various economic downside risks”, though demand for private residential and industrial building developments remained resilient, according to BCA.

For 2023, public sector contracts awarded are expected to make up about 60% of construction demand, representing between $16 billion and $19 billion in value. Public sector demand will be supported by a ramp-up in the supply of Build-to-Order flats by HDB as well as the construction of industrial and institutional buildings such as water treatment plants, educational buildings and community clubs. In addition, civil engineering construction demand will remain bolstered by MRT line construction and other infrastructure works.

Private sector construction demand is projected to come in between $11 billion and $13 billion in 2023. Both residential and industrial building construction demand are expected to be similar to last year’s level. Commercial building demand is anticipated to increase, supported by the rescheduling of some projects from 2022 to 2023, along with the redevelopment of old commercial assets.

Meanwhile, 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, slightly higher than the $30.2 billion registered for 2022 based on preliminary figures. BCA attributes this to a steady level of construction demand and some backlog of remaining workloads impacted by the Covid-19 outbreak since 2020.

Over the medium term, BCA expects total construction demand to reach between $25 billion and $32 billion per year from 2024 to 2027. Public sector demand is expected between $14 billion to $18 billion per annum, while private sector demand is projected to total $11 billion to $14 billion per annum. The projection excludes the Changi Airport Terminal 5 development and its associated infrastructure projects as well as the expansion of two integrated resorts, in view of the unavailability of confirmed details such as award timelines and construction phasing for the respective projects.

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