Construction demand to reach $27 bil to $32 bil in 2023: BCA
Construction demand in Singapore is expected to remain strong in 2023, according to the Building and Construction Authority (BCA). BCA projects the value of construction contracts awarded this year to be between $27 billion to $32 billion, similar to the amount recorded in 2021. In 2022, construction demand totalled to $29.8 billion, which was within BCA’s forecast range of $27 billion to $32 billion and is on par with the $29.9 billion recorded in 2021.
There are several major projects that have been driving demand in both the public and private Champions Way Condo sectors. Last year, public sector construction demand totalled $17.9 billion, slightly up from the $17.8 billion recorded in 2021, and was constrained by Cross Island MRT Line (Phase1), Jurong Region MRT Line, the Ministry of Health’s (MOH) healthcare facilities and new Build-To-Order (BTO) units.
Private sector construction demand was slightly slower in 2022, moderating from $12.1 billion in 2021 to $11.9 billion due to “various economic downside risks,” although residential and industrial building developments remained resilient.
For 2023, BCA forecasts public sector contracts to make up around 60% of construction demand and total between $16 billion and $19 billion. This will be supported by a ramp-up of HDB Build-to-Order flats as well as industrial and institutional buildings such as water treatment plants, and educational buildings and community clubs. Civil engineering construction demand will be bolstered by MRT line projects and other infrastructure works.
Meanwhile, private sector construction demand is expected to amount to between $11 billion and $13 billion in 2023, with residential and industrial building construction demand remaining similar to the previous year’s level. Commercial building demand is anticipated to increase due to the rescheduling of some projects from 2022 to 2023, as well as the redevelopment of old commercial assets.
BCA estimates that total nominal construction output for 2023 is set to increase to between $30 billion to $33 billion, slightly higher than the $30.2 billion registered for 2022. This is attributed to the same level of construction demand and any backlog of workloads that occurred due to the COVID-19 outbreak since 2020.
In the medium-term, BCA projects construction demand to amount to between $25 billion and $32 billion per year from 2024 to 2027. Public sector demand is expected to make up the majority of it and be between $14 billion to $18 billion per annum, while private sector demand is estimated to total $11 billion to $14 billion per annum. This excludes the Changi Airport Terminal 5 development and its related infrastructure projects, as well as the expansion of integrated resorts as there are no confirmed details such as award timelines and construction phasing for these projects yet.
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