Construction sector’s performance to return to near pre-pandemic levels in 2022: Turner & Townsend

By Hailey Yu
/ Edgeprop Singapore |
Construction site in Singapore (Credit: Albert Chua / The Edge Singapore)
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SINGAPORE (EDGEPROP) - A research report by Turner & Townsend released on April 12 indicates that Singapore’s construction sector is gradually recovering. In 2021, construction demand surged 42% y-o-y to $29.9 billion, driven by public residential and infrastructure projects.
“The overall balance of workload continues to be weighted towards public-sector investment brought forward by the government, which contributes about 60% of overall workload,” the report says.
Recovery momentum is expected to persist in 2022 amid a “cautiously optimistic” outlook, notes Turner & Townsend. Construction activity is anticipated to return to near pre-pandemic levels this year, supported by sustained construction demand. The Building and Construction Authority (BCA) is projecting demand to reach between $27 billion and $32 billion in 2022.
Public-sector projects are expected to continue making up the bulk of construction demand at 60% of the workload, while the private-sector pipeline will make up the remaining 40%. However, Turner & Townsend cautions that it remains to be seen whether there will be any dampening in private residential construction demand following the latest round of property cooling measures.
In addition, the report highlights that the sector continues to be impacted by headwinds, including ongoing labour shortages. Rising costs of materials, underpinned by the rise in oil prices and global supply-chain challenges, are also a key concern. According to Turner & Townsend, tender prices for construction projects are anticipated to grow between 5% and 8% across the industry in 2022.
Despite the uncertainties, Khoo Sze Boon, managing director, Singapore, Vietnam and Philippines, at Turner & Townsend, remains upbeat on the sector’s prospects. “We see Singapore’s construction sector on a steady path to recovery, with the private sector primed to follow public-sector investment in due course,” he comments.
The Singapore government has also taken steps to combat the labour shortage and reduce reliance on migrant workers, including lowering the migrant worker dependency ratio ceiling and replacing the current man-year entitlement framework with a levy framework.
In addition, it has dedicated funds to strengthen the industry’s digital capabilities and talent attraction, which Khoo believes will be significantly beneficial. “Over the long term, building up the resilience of the construction sector through sustained industry collaboration, digitalisation and technology innovation will be instrumental to its ability to withstand and respond effectively to major changes in the market,” he explains.

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