Chart of the Day: Construction deals to hit S$28-30b by 2015

It's a "more realistic estimate," says analyst.

According to CIMB, last year, the Building and Construction Authority (BCA) estimated total construction contracts awarded in 2012 to be in the range of S$21bn-27bn.

Construction contracts awarded are estimated to be in the range of S$19bn to S$27bn for 2013 and 2014. According to BCA‟s estimation, around 60% of total contracts awarded (S$12bn-15bn) will come from public projects.

Here's more from CIMB:

We think that BCA‟s estimation could be a tad conservative. Although property sales will slow after the recently introduced property measures, construction demand will still be supported by the completion of previous private unit launches and planned commercial, industrial, civil engineering and MRT expansion projects.

This will be given an added boost by the recently unveiled plans for DUO, one of two M+S development projects worth S$3bn, targeted for completion by 2017.

We think that a more realistic estimate could be closer to S$28bn-30bn by 2014, and ~S$27bn in 2015. The best thing for the sector is that all these government infrastructure initiatives will provide a stable source of contracts to bid for and put the feast-and-famine days behind the contractors.