Construction demand expanded 9.5% to $33.4b in 2019

Demand for petrochemical facilities spurred growth.

Total construction demand rose 9.5% to $33.4b in 2019, according to the Building and Construction Authority (BCA). The preliminary construction demand for the public and private sector was $19b and $14.4b, respectively.

The growth was attributed to a stronger than expected growth in industrial construction demand for petrochemical facilities despite a slowdown in the manufacturing sector.

For 2020, the total demand is projected to hit $28b-$33b, with the public sector making up 60% at $17.5b-$20.5b. This is expected to be spurred by major infrastructure projects like the Integrated Waste Management Facility, infrastructure works for Changi Airport Terminal 5, Jurong Region MRT Line and Cross Island MRT Line.

Meanwhile, demand from the private sector is projected at $10.5b-$12.5b, supported by projects like the redevelopment of en-bloc sale sites, recreational developments at Mandai Park, Changi Airport new taxiway and berth facilities at Jurong Port and Tanjong Pagar Terminal.

At the same time, the total nominal construction output is projected to grow to $30b-$32b, from $28b in 2019, supported by an improved demand since 2018 following the slowdown in 2015-2017.

In the medium term, construction demand is projected to reach between $27b and $34b per year for 2021 and 2022, and between $28b-$35b per year for 2023 and 2024.

The public sector is expected to continue leading demand by contributing $16b to S$20b per year from 2021 to 2024, with building projects and civil engineering works each taking up about half of the demand.

Meanwhile, demand in the private sector is expected to stay at a moderate level, given a likely continued global economic uncertainties and the current overhang in the supply of private housing units. The planned expansion of the two Integrated Resorts is expected to buoy demand in the private sector.