Lag effect may see construction easing as contracts fell last year
But slew of public sector projects may keep builders busy in the days to come
By KALPANA RASHIWALA
(SINGAPORE) The value of construction demand, as measured by contracts awarded in Singapore, fell 41 per cent last year to $21 billion on the back of the economic slowdown and global financial slump. However, the 'exceptionally strong construction demand' in 2007 and 2008 buoyed on-site construction activity to a record level of about $30 billion in 2009.
Senior Minister of State for National Development and Education Grace Fu reavealed this yesterday in her opening addresss at the BCA-Redas Construction & Property Prospects 2010 Seminar yesterday.
On-site construction activity or construction output is measured by certified progress payments. Building & Construction Authority (BCA) forecasts that construction output will ease to $27-29 billion this year and soften further in 2011-2012. This will be in view of a moderation in construction demand since last year. For this year, the authority predicts that some $21-27 billion of contracts could be awarded, with the figure easing to $18-25 billion per year in 2011-2012.
Last year's $30.4 billion record construction output reflects a 16 per cent rise from $26.2 billion in the preceding year. It also marks the third consecutive year of double-digit growth.
The drop in construction demand in 2009 was much more pronounced for private sector contracts, which tumbled from $20.2 billion in 2008 to $7.5 billion last year. BCA attributed this to the effects of the global financial crisis, particularly in first-half 2009.
Public sector construction contracts fell at a much slower clip, from $15.5 billion in 2008 to $13.5 billion last year, making up 64 per cent of total construction demand in 2009. Civil engineering works made up the lion's share of public sector demand, hitting a record $8 billion last year, fuelled by major contracts awarded for the MRT Downtown Line Stage 2, Marina Coastal Expressway (Marina Wharf) and first phase of the Jurong Rock Cavern, among others.
In the private sector, residential construction demand plummeted by slightly more than half to $2.9 billion last year as developers became cautious amid looming uncertainty especially in the early part of 2009. Commercial construction demand in the private sector also shrank from a high of $8.3 billion in 2008 to $1.2 billion last year on the back of the battered office market as well the high statistical base in 2008, when major construction jobs were awarded for the development of the two integrated resorts and the Marina Bay Financial Centre.
Ms Fu said that economic growth this year will translate to a gradual pick-up in private sector construction demand.
She also emphasised that Government will continue to invest in infrastructure works. Key public sector works include the MRT Downtown Line Stage 3, construction of new HDB flats and upgrading and development of new educational and healthcare facilities. Koh Brothers group CEO and managing director Francis Koh was heartened by the list of government construction jobs over next few years revealed by Ms Fu.
Singapore Contractors Association executive director Simon Lee told BT: 'We are are hoping that the value of construction work can be more steady; big fluctuations of work load make it difficult for contractors to optimise resources and maintain competencies'. He also suggests more holistic public and private sector partnership for Singapore contractors to export their services overseas, for instance, in green building technology, mass rapid transit systems and affordable housing.
At yesterday's seminar at Orchard Hotel, Ms Fu witnessed the signing of an MOU involving BCA Academy, UniSIM and Singapore Polytechnic to develop a Bachelor degree programme in integrated events and sustainable facilities management, which focuses on green systems maintenance and management.
Separately, BCA will collaborate with University College of London to conduct a Master of Science programme in Facility and Environment Management in Singapore. 'Such internationally recognised certifications will allow our green professionals to meet the needs of the industry and the region,' Ms Fu said.
She also highlighted efforts to grow the pool of engineers in Singapore. The Professional Engineers Board (PEB)recently expanded the list of recognised qualifications for registration as professional engineers. BCA and PEB are also working on promoting engineering as a 'rewarding lifelong career'.
Mr Koh acknowledged that getting local engineers is a major challenge for the construction industry.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
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