$47b to $53b in construction contracts expected in 2026: BCA

SINGAPORE - Some $47 billion to $53 billion in construction contracts across the public and private sectors are expected to be awarded in 2026, driven by projects such as Changi Airport Terminal 5 and the Marina Bay Sands expansion.

In 2025, an estimated $50.5 billion in contracts were awarded, higher than the $44.6 billion in 2024, the Building and Construction Authority (BCA) said on Jan 22. It attributed the uptrend to the construction of institutional and housing projects.

BCA expects total construction demand from 2027 to 2030 to range from $39 billion to $46 billion each year.

Over the medium term, construction demand will be supported by developments such as Build-To-Order (BTO) flats, the redevelopment of the National University Hospital at Kent Ridge, various junior colleges and the new Singapore University of Social Sciences city campus.

While the demand outlook appears positive in the medium term, BCA said this may change due to unforeseen global economic risks.

It noted that the Changi Airport Terminal 5 development is a one-off project, and industry demand could moderate after it is completed in the mid-2030s – potentially reverting to pre-Covid-19 pandemic levels.

On Jan 22, National Development Minister Chee Hong Tat called on the industry to press on with transformation efforts, such as to scale up the adoption of technology and digital tools, to save time, costs and manpower.

Speaking at the BCA-REDAS (Real Estate Developers’ Association of Singapore) seminar held at Raffles City Convention Centre, Mr Chee urged construction firms to not be complacent.

“If we continue business-as-usual, we will soon run into resource constraints, which will adversely impact the ability of our sector to seize new growth opportunities,” he said.

Mr Chee announced several initiatives to support the construction industry.

First, a new tranche of the Productivity Solutions Grant will take effect from April 1 to help built environment firms tap technologies to boost productivity.

The grant provides small and medium-sized enterprises with up to 50 per cent of the costs of adopting digital solutions.

The current tranche runs from April 2023 to March 2026.

More than 1,100 firms have tapped the grant so far, Mr Chee said.

For example, engineering consultant Novaars International received funding support to roll out an artificial intelligence-powered facade inspection system, which resulted in 30 per cent savings in labour and time.

The list of advanced equipment and digital solutions that are approved for the grant has also been expanded to include construction robots and solutions that streamline work processes, such as for contract management.

Firms that benefited from the grant previously may also apply for the new tranche, the minister added.

Mr Yogesh Kumar Chhabra, managing director of Novaars International, said the grant helped the company to defray the costs of adopting the AI system in 2024. The system cuts down the time taken to do a facade inspection report from seven days to two days.

The firm carries out inspections in buildings that are more than 20 years old and over 30m in height to detect defects such as water seepage and cracks in concrete or glass panels.

“The AI system is trained to spot defects and give us the first cut on a building’s overall condition, allowing us to focus on hot spots,” he said.

Before the firm adopted the technology in 2024, it would manually scrutinise high-resolution photos.

The second initiative Mr Chee announced is that BCA and the Project Management Institute will launch an enhanced framework to strengthen the existing accreditation for project managers in the second half of 2026, to keep pace with the evolving needs of the industry.

The project manager competency framework will provide training to build skills such as stakeholder and supply chain management. They will also receive credentials, which are recognised locally and internationally.

Mr Chee noted that project managers play an important role in optimising labour, costs and time throughout a project life cycle.

“Through (the enhanced framework), our aim is to develop a pool of reliable project managers who can confidently help our built environment firms deliver projects on schedule, within budget and resources, and aligned with quality and safety requirements.”

Mr Chee added that Dr Liu Thai Ker, who died on Jan 18 at the age of 87, embodied the soul of a public service officer. Dr Liu was widely known as Singapore’s first master planner, who helped plan 20 out of 24 HDB towns.

“To continue the good work of our pioneers like Dr Liu, we need to continue grooming talents with the aptitude and skills, and also passion, to work across disciplines,” he said.

Last, the listing validity for the Public Sector Panels of Consultants will be extended from one year to three years from June 1.

Consultants listed on the panel can participate in public sector consultancy tenders. To be listed, firms must show they have the necessary resources and record in providing consultancy services.

At present, firms are required to renew their registration every year to maintain their listing.

Mr Chee said this will help to reduce the administrative load on firms by lowering the frequency of submissions and renewals.

“I hope this will help them to save time and save costs, which they can then use to provide better service to their clients or, if they have some savings, pay higher salaries to their staff to improve talent attraction and retention,” he added.

Mr Chee also said that the rating system in which public sector agencies give built environment consultants a score based on their performance should be a “two-way street”, for fairness.

He was referring to the Consultants Performance Appraisal System, where agencies evaluate the consultants’ performance every six months throughout a project.

Firms with better scores have an advantage in securing tenders, while those with low scores are delisted from the Public Sector Panels of Consultants for three months.

Mr Chee said he wants to know how public sector agencies are working with the industry. By giving consultants a chance to rate agencies, it will foster a fairer system, he said.

If an agency has consistently poor ratings from consultants, “I will ask them why and how do you improve”, he added.

Addressing the strong demand for housing, Mr Chee said the Government has been ramping up the supply of BTO flats and private homes.

Some

19,600 BTO flats will be launched in 2026,

including 4,000 with shorter waiting times of less than three years.

Between 2025 and 2027, HDB will launch about 55,000 BTO flats – more than its earlier commitment of 50,000 flats, he added.

If demand remains strong, HDB is able to further increase BTO supply beyond the 55,000-flat target, Mr Chee said. He added that he has asked the board to prepare for this scenario and to carry out the plans when he makes the decision.

“So this is not just Build-To-Order, this is Build To Minister’s Order,” he quipped.

As for private homes, close to 4,600 units will be released under the Government Land Sales programme in the first half of 2026, nearly 50 per cent more than the average half-yearly supply over the past decade, Mr Chee said.

The Government will monitor economic and property market conditions, and take necessary actions to ensure a stable and sustainable property market, he added.