Public sector projects drive Singapore’s construction recovery
The global pandemic continues to evolve and the resurgence of COVID-19 cases in many countries is the most significant risk to the construction market outlook. For Singapore, it is vital that the population continues to be vigilant with all the safe management measures to prevent another outbreak that would disrupt the construction industry again.
By Khoo Sze Boon, Managing Director – Singapore and Cheryl Lum, Director, Head of Data and Research
Construction demand outlook
Singapore construction demand declined 37 percent to S$21.0bn in 2020, a significant reduction from S$33.5bn in 2019. This is the lowest level construction demand has reached in the past ten years and many construction project implementation schedules have been severely impacted and pushed back due to COVID-19. Investment spending from the public and private sectors have reduced by 33 percent and 43 percent respectively.
Construction activity in 2021 will continue to be driven mainly by the public sector, contributing about 65 percent of the total estimated work demand. Key projects anticipated to be rolled out include various contracts for Jurong Region MRT Line, Cross Island MRT Line Phase 1 and Deep Tunnel Sewerage System (DTSS) Phase 2. Besides civil engineering projects, the other key driver will be the development of more new public housing projects.
Cost escalation forecast
For 2021, tender pricing for new projects is anticipated to increase and remain volatile for some time, driven by contractors allowing for labour shortages, increase in key construction material costs (reinforcement), availability of contracting resources and the implementation of the COVID-safe management measures.
Download the report to see more economic data and insight, and to read about tender conditions in Singapore.
Please visit our COVID-19 response page for all of our resources relating to the impact of COVID-19 on the construction sector.