Public sector tasks to drive bulk of construction sector’s recovery on 2021
19 January, 2021
Construction demand is likely to make a average recovery found in 2021, largely supported by consumer sector demand, with a number of “major” infrastructure jobs to get awarded this season, the Building and Structure Authority (BCA) said on Monday (Jan 18).
BCA projected that S$23 billion to S$28 billion well worth of construction contracts will be awarded in 2021.
That marks a noticable difference from the estimated S$21.3 billion awarded in 2020, a sum that fell within projections that were revised downwards in the wake of the COVID-19 pandemic.
Speaking by a seminar on the house sector’s prospects on a single day, National Production Minister Desmond Lee stated the federal government will contribute about 65 per cent, or between S$15 billion to S$18 billion, of the entire construction demand this season.
“This is greater than the S$13.2 billion worth of people sector projects in 2020.
“Public sector demand on 2021 will be driven by major public housing and infrastructure jobs, such as for example (the Land Transport Authority’s) Integrated Transport Hub at Jurong East, the Jurong Region Brand and the Cross Island Line,” said Mr Lee.
He added that you will have around S$6 billion worthy of of smaller community sector assignments, which are significantly less than S$100 million in contract benefit, such as for example cycling paths and upgrading gets results.
“That is comparable with the gross annual average pre-COVID, and can benefit our smaller and mid-sized contractors,” he said.
But on the personal sector construction side, demand isn't expected to return to pre-COVID-19 amounts yet, as “investors will probably remain cautious”, Mr Lee added.
Demand out of this sector is projected to fall within S$8 billion to S$10 billion found in 2021, with the bulk of it coming from the advancement of staying en bloc residential sites and key retrofitting of commercial advancements, among others.
STRONGER RECOVERY MAY BE ON THE HORIZON
The minister said authorities expect a “sustained recovery of construction demand over another five years”, with early forecasts that construction demand may further strengthen to S$25 billion to S$32 billion between 2022 and 2025.
“This forecast hasn't taken into account potential new contracts for Changi Airport Terminal 5 and the expansion of both Integrated Resorts, as these project timelines are still under review because of disruptions from COVID-19,” he added.
In the channel term, the construction sector’s growth will be supported by public sector developments, such as public housing, transport and healthcare infrastructure, stated Mr Lee.
These projects will contribute S$14 billion to S$18 billion every year in this era, BCA added.
But the sector continues to be facing “significant headwinds”, specifically with a good manpower situation amid the issues of attracting new foreign workers.
Acknowledging such concerns, Mr Lee explained authorities have been dealing with industry partners to help ease the labour crunch.
He cited how the manpower ministry has worked with the country’s contractors association to “facilitate matching of employees found in Singapore with new employers” through a manpower exchange platform.
Since last December, entry restrictions are also eased to allow considerably more existing and new work permit holders to enter Singapore.
“This was not really a straightforward endeavour, given the global pandemic situation,” Mr Lee said.
“It continues to require close coordination between organizations … to ensure that we can bring in sufficient workers to ease the manpower shortages faced by organizations, and yet to take action in a safe way, with satisfactory testing and quarantine establishments, in order to protect public health.
“We will continue steadily to monitor the situation and adjust our measures as essential to support the sector,” he said.
Mr Lee, however, also said that the pandemic has emphasised the “have to build in extra resilience in to the system and drastically reduce our over-reliance on overseas guest workers”.
Compared to that end, authorities will continue to press the adoption of digital technologies.
“We are also seeking at even more strengthening our plans to facilitate transformation and to support businesses. We will announce additional information through the Budget season this year,” he added.
PROPERTY MARKET OUTLOOK
Mr Lee said the house industry has remained largely resilient, even amid the COVID-19 pandemic and its own fallout.
He noted that the rate of upsurge in private housing rates has gathered momentum, builders’ sales at new launches have already been “robust” and there has been healthy bidding interest found in land tenders.
But Mr Lee warned that the house market is “not insulated” from global monetary uncertainties, “nor setbacks to the recovery in the household labour market”.
He urged creators to remain prudent in their territory bidding and households to exercise caution in their getting decisions, “given the uncertain economical outlook and possible go up in interest rates”.
“The Government is monitoring the developments in the house market incredibly closely. We will adapt our policies if essential to maintain a stable and sustainable property marketplace for all Singaporeans,” he said.
Source: www.channelnewsasia.com