Construction demand in Singapore expected to stay strong in 2020 after hitting 5-year high in 2019

Total construction demand is expected to range between $28 billion and $33 billion this year. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Construction demand is expected to remain strong in 2020 after hitting a five-year high last year, spurred by a sustained recovery in public sector building demand amid economic headwinds and global geopolitical uncertainty.

Total construction demand, which is the value of construction contracts to be awarded, is expected to range between $28 billion and $33 billion this year, led by public sector building projects including public housing, as well as private sector projects such as the continued redevelopment of en bloc residential sites and berth facilities at Jurong Port and Tanjong Pagar Terminal.

The construction sector accounts for about 4 per cent of Singapore's total gross domestic product.

Last year, some $33.4 billion worth of projects were awarded, 9.5 per cent more than in 2018 and slightly higher than the upper end of the $27 billion-$32 billion forecast range.

This came as the private sector saw unexpectedly higher construction demand in 2019, driven by the construction of new petrochemical facilities by Linde and ExxonMobil and demand from en bloc residential projects.

"Despite the economic headwinds and global uncertainties, we remain optimistic about the construction demand in the coming years," Mr Zaqy Mohamad, Minister of State for National Development and Manpower said at the BCA-Redas built environment and property prospects seminar on Wednesday morning (Jan 8).

"Beyond 2020, we see construction demand strengthening further...supported by major developments such as Changi Airport Terminal 5, developments at Jurong Lake District, the expansion of the two integrated resorts at Marina Bay Sands and Resorts World Sentosa and new MRT lines such as the Cross Island line," he said.

Public construction demand also grew last year with industrial and institutional building projects in the Punggol Digital District, and strong demand for major civil engineering projects.

The Building and Construction Authority (BCA) projects construction demand to come in between $27 billion and $34 billion a year from 2021 to 2022, and between $28 billion and $35 billion a year from 2023 to 2024.

Mr Zaqy also noted that the proportion of the construction industry's professionals, managers, executives and technicians (PMET) jobs taken up by locals has fallen over the past decade, even though the local PMET population has increased.

This as more locals opted to join sectors that seem to have better working environments and less manual work, and as construction employers could readily find less-skilled, lower-cost foreign workers.

To support the development of a strong core local workforce in construction, Mr Zaqy said it has been working closely with service buyers, industry associations and institutes of higher learning (IHLs).

"First, we want to build a pipeline of skilled local graduates from our IHLs and mid-career professionals, in particular in engineering and project management. These jobs are core to construction, which we are focusing on to build better career and wage prospects," said Mr Zaqy.

But more remains to be done, he noted.

For instance, in 2018, BCA launched the Building Information Modelling (BIM) professional conversion programme (PCP), which supports mid-career PMETs to acquire the competencies to be BIM professionals in the built environment sector.

"But few firms have taken this up, as compared to the PCPs in other sectors such as healthcare and manufacturing. So we will need to work with you to help more fresh graduates and mid-careers enter the sector," Mr Zaqy said.

"The Government is also looking at how to further strengthen our policy framework to support a strong local core. We will announce the changes when details are ready," he said.

Correction note: This article has been edited to reflect the correct value of total construction demand expected this year. We are sorry for the error.

Join ST's Telegram channel and get the latest breaking news delivered to you.