Public sector projects to drive Singapore construction activities in 2021

The Building and Construction Authority expects construction demand to be worth around $28b over the full year.

Construction recovery in 2021 will continue to be driven primarily by the public sector at 65% of industry-wide spending, up from 62% in 2020, according to a report by professional services company Turner & Townsend. It says this comes as prospects for construction demand are expected to improve marginally, 

According to the report, the Building and Construction Authority (BCA) projects construction demand for 2021 to be worth between $23b and $28b in value.

The government also expects a sustained recovery in construction demand over the next five years, notwithstanding that the construction demand for 2021 is not yet back to pre-COVID level.

Some of the notable projects in the pipeline include subsequent phases of major MRT infrastructure projects, new healthcare facilities, and new regional centres.

Whilst construction output is due to rise to between $24b and $27b in 2021, this increase will be largely attributed to the backlog created during the pandemic.

The report also stated that despite a decline in construction activity, tender pricing for new projects is anticipated to increase from 6% to 10%, driven by contractors allowing for labour shortages, increases in key construction material costs, availability of contracting resources, and the implementation of the safe management measures.

“Singapore’s construction industry remains one of the most severely affected sectors hit by the COVID-19 pandemic. As we continue down the path to recovery with vaccination programmes in progress and the number of cases under control, it is imperative that the construction sector rebuilds itself through collaboration and innovation,” Turner & Townsend managing director for Singapore Khoo Sze Boon said.