Construction demand to rise to $38 billion in 2024: BCA
By Nicholas Lam
/ EdgeProp Singapore |
Major upcoming public sector projects to be awarded in 2024 include HDB's new BTO developments (Photo: Samuel Isaac Chua/EdgeProp SIngapore)
For 2024, the Building & Construction Authority (BCA) estimates that the total construction demand will be between $32 billion and $38 billion in nominal terms, above 2023's figure of $33.8 billion.
Source: Construction Prospects 2024, BCA
The full-year preliminary figure of $33.8 billion exceeded BCA's projection of $27 billion to $32 billion in January 2023. BCA attributes the preliminary increase in construction demand in 2023 partly to higher tender prices, expedited construction awards for several private residential projects and ramping up of HDB's public housing projects.
Public sector construction demand reached $19.5 billion in 2023, driven by significant projects, including Cross Island MRT Line (Phases 1 & 2), institutional building developments and HDB's Built-to-Order (BTO) developments. Private sector construction demand improved from $12.5 billion in 2022 to $14.3 billion in 2023 due to residential developments under the Government Land Sales (GLS) and past en-bloc sales sites, integrated developments and major hotel refurbishment projects.
Source: Construction Prospects 2024, BCA
The public sector is expected to contribute to 55% of total construction demand in 2024, contributing to between $18 billion and $21 billion worth of projects. Major upcoming public sector projects to be awarded in 2024 include HDB's new BTO developments, Cross Island MRT Line contracts (Phase 2), infrastructure works for the future Changi Airport Termina 5, Tuas Port developments, and other major road enhancement as well as drainage improvement works.
Private sector construction demand is forecast to contribute between $14 billion and $17 billion in 2024. BCA anticipates that private sector construction demand will come mainly from residential developments sold under the GLS programme, expansion of the two Integrated Resorts, and the redevelopment of mixed-use properties such as Singtel's Comcentre, Central Mall, Central Square and Tanglin Shopping Centre as well as industrial facilities.
Source: Construction Prospects 2024, BCA
Commercial construction demand across both the private and public sectors is poised to show the highest growth, from $3.4 billion in 2023 to a projected $5.9 billion to $6.6 billion in 2024, says Teo Jing Siong, BCA group director of strategic planning and transformation. Teo was speaking at the BCA-REDAS Built Environment and Property Prospects Seminar on Jan 15.
Civil engineering construction demand is also expected to show substantial growth, rising from $7.6 billion in 2023 to between $7.9 and $9 billion this year, says BCA's Teo.
Meanwhile, private residential construction demand decreased from $7.6 billion to $3.7 and $4.5 billion. One reason for this fall in construction demand could be the moderation of buyer demand due to lower land stock from past en-bloc sales sites.
Source: Construction Prospects 2024, BCA
Annual construction demand is projected to reach between $31 billion and $38 billion from 2025 to 2028. BCA says the public sector will continue to lead the demand and is expected to contribute $19 billion to $23 billion per year from 2025 to 2028. Building projects and civil engineering works are projected to make up 70% and 30% of public sector projects, respectively.
Major developments include MRT projects such as Cross Island Line (Phase 3) and Downtown Line Extension to Sungei Kadut, Alexandra Hospital redevelopment, integrated developments in Siglap South and Toa Payoh, a new integrated hospital in Bedok and redevelopment of various junior colleges.
BCA also expects private sector construction demand to remain stable in the medium term at between $12 billion and $15 billion annually from 2025 to 2028.
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