Singapore's construction sector plays a prominent role in the economy and is expected to perform strongly in the coming years. According to the Singapore Building and Construction Authority (BCA), domestic construction demand increased by 16% year-on-year from S$ 27.6 billion in 2010 to S$ 32 billion in 2011. The increase was backed by strong public sector construction demand arising from the ramp-up in public housing projects and MRT Downtown Line Stage 3. For 2012, the total construction demand is projected to be between S$ 21 billion and S$ 27 billion, of which, about 60% is expected to come from the public sector.
For 2013 and 2014, the average construction demand is projected to range between S$ 19 billion and S$ 27 billion per annum. The public sector construction demand is likely to reach between S$ 12 billion and S$ 15 billion a year in 2013 to 2014, with about 60% of the total demand coming from building projects while the remaining 40% of demand will come from civil engineering projects.
Till the end of 2012, the public sector construction demand is expected to be contributing between S$ 13 billion and S$ 15 billion worth of construction orders. The support is expected to come from the continued strong public housing developments, as well as construction demand for institutional building and civil engineering projects. The private sector construction demand may soften to between S$ 8 billion and S$ 12 billion in 2012 amid the global economic uncertainty and a slowdown in the Singapore economy. Private residential building construction demand is projected to drop to between S$ 3.4 billion and S$ 4.8 billion in 2012, in view of the current subdued property market sentiments.
In 2011, the Housing and Development Board ("HDB") launched 25,000 Build-to-order ("BTO") units to meet the demands of home buyers. The public housing segment is expected to see sustainable growth in the next two years as the government continues to ramp up supply of BTO flats, estimated at 50,000 units. Early this year the Public Utilities Board ("PUB") announced that it will spend S$750 million over the next five years on 20 drainage projects.
The Government continues to accelerate infrastructure spending to generate growth. Demand will be driven by the continued strong public housing developments, as well as construction demand for institutional building and civil engineering projects. The recent round of property cooling measures by the government appears to have an impact on the property market in general. For the coming years, the government remains focused on efficient capital recycling through timely residential launches, and selective land bank replenishment.With sustained growth in investments and rapid economic developments, Singapore construction industry is expected to grow at a stupendous rate.
(Source: Insight Alpha)
Singapore