While domestic construction demand is estimated to reach between S$27 and S$32 billion this year, it is expected to fall due to financial crisis
By
Joyce Teo
Mr Mah (left) said that his ministry will monitor the construction market situation closely, taking into account the construction demand, contracts awarded and construction cost trends. -- ST PHOTO: SAMUEL HE
SINGAPORE'S construction sector will not escape the financial turmoil going ahead but the Government will do its part to help cushion any slide in demand, National Development Minister Mah Bow Tan said on Tuesday night.
While the domestic construction demand is estimated to reach between $27 billion and $32 billion this year, it is expected to fall due to the economic downturn, said Mr Mah.
'Accordingly, we must all be prepared to face some tough and challenging times ahead,' he warned in his speech to the Singapore Contractors Association 71st anniversary dinner.
The crisis has so far not caused any disruption or slowdown and progress payments of projects have remained prompt and stable.
'But we still need to be watchful, as the situation can deteriorate quickly, and the impact of the financial crisis feeds into the real economy over the next few months,' said Mr Mah.
On its part, the Government is prepared to consider suggestions that it bring forward the public projects that were earlier deferred.
'It is something that we are in a position to consider and will certainly do so, should the need arises. However, we must consider the timing carefully,' said Mr Mah.
The Government has pushed back $4.7 billion worth of public sector construction projects such as the Jurong General Hospital to ease the pressure on building costs.
Mr Mah said that his ministry will monitor the construction market situation closely, taking into account the construction demand, contracts awarded and construction cost trends.
When the need arises and at the appropriate time, the Government will restart some of these previously deferred projects, to take up the slack in the industry.
"Doing so now, when the availability of skilled manpower, equipment and other resources is still constrained, will not help. It will only drive the already high construction costs up," he explained.
On a brighter note, Mr Mah said the slowdown presents an opportunity for the industry to consolidate and strengthen its capabilities after several years of strong growth.
It must start preparing itself well to tackle the increasingly challenging and dynamic business environment, as well as to exploit future opportunities. This include exercising greater prudence in the management of financial resources and watching against over-extending themselves on business risks, said Mr Mah.
To stay relevant, the industry has to sharpen its competitive edge by raising the level of professionalism as well as pursuing the goal of sustainable development, he added.
