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Construction demand for 2014 to remain strong

Thursday, 9 January 2014

Singapore, 9 January 2014 - Contracts for the built environment industry could reach between $31 billion and $38 billion1 this year, driven by strong public housing demand and anticipated higher construction demand for institutional developments and major infrastructure projects. This comes on the heels of the sector's strong performance in 2013, where total construction demand reached a historical high of $35.8 billion, exceeding the upper-bound projection of $34 billion in 2013 by about 5%.

Table: Review and Outlook for Construction Demand & Output

Year Construction Demand(Value of Contracts Awarded) Construction Output(Payment made for Work Done)
Public Private Total
2013p $14.8 billion $21.0 billion $35.8 billion
≈ $33 billion
2014f $19 to 22 billion $12 to 16 billion $31 to 38 billion
$34 to 36 billion
2015f $14 to 18 billion per year(60% from building projects & 40% from civil engineering projects) - $25 to 34 billion per year
$29 to 37 billion
per year
2016f

p : Preliminary      f: Forecast

Public sector projects are expected to contribute to the bulk of the industry's total demand at close to 60%, or between $19-22 billion. The expansion will be fuelled by an anticipated higher volume of contracts to be awarded for institutional and civil engineering construction works.

Meanwhile, private sector demand is expected to moderate to $12-16 billion in 2014, compared to $21 billion last year. The less favourable outlook is in view of the current market volatility amid the Government's multi-pronged approach to stabilise the property market, the substantial supply of completed housing units coming on-stream over the next few years, as well as the scaling back of new Government land sales for the first half of 2014. (Please refer to Annex A for details on construction demand).

For 2015 and 2016, average construction demand is projected to be sustained at between $25-34 billion2 per annum. 60% of the total demand is forecasted to come from building projects while the remaining 40% is expected to come from civil engineering projects.

Total construction output3, or payment for work done, was estimated to be about $33 billion for 2013, supported by stronger on-site activities from the construction of the Marina Coastal Expressway, Downtown MRT Line Stages 2 & 3, and both public and private residential developments. Outlook for on-site construction activities in the following years remains bright at between $34-36 billion for 2014, and $29-37 billion annually for 2015 and 2016, given the high level of contracts awarded since 2011.

These figures were released by the Building and Construction Authority (BCA) at the annual BCA-REDAS Built Environment and Property Prospects seminar held at the Grand Copthorne Waterfront hotel today. At the event, Guest-of-Honour Mr Lee Yi Shyan, Senior Minister of State for National Development and Trade and Industry, launched BCA's "Quality Mark Homes" mobile application to allow home owners to search for residential developments that are certified under the BCA Quality Mark scheme, a voluntary scheme launched in 2002 to set the standard for workmanship quality in homes (more details in Annex B). Under the scheme, every unit of a residential development is assessed to meet a high standard of construction workmanship before the developers hand over the units to the homeowners. More than 64,000 homes in 283 private residential developments have been assessed or committed for assessment since the launch of the scheme. In 2012, 60% of the private residential units launched that year were committed for the Quality Mark certification.

 

Footnotes

1 Construction demand is measured by total value of construction contracts awarded. All construction demand figures stated here exclude reclamation projects.
2 Demand forecast beyond the immediate one year will be done on a rolling basis to take into account subsequent changes in economic outlook and other pertinent factors.
3 Construction output is measured by total value of certified progress payments.

Annex A - Construction demand (23KB .pdf)

Annex B - New QM app (632KB .pdf)

Related:

Speech by SMS Lee Yi Shyan at the BCA-REDAS Built Environment and Property Prospects Seminar 2014
Welcome speech by BCA CEO Dr. John Keung at the BCA-REDAS Built Environment and Property Prospects Seminar 2014 at the Grand Copthorne Waterfront Hotel
Portable document format version of the media release is also available (709KB .pdf).

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