According to the forecasts, the demand in the constructions sector will continue to grow, due to firm contracts from the public sector. This is great news for most companies unrolling activities in this domain. However, this year may turn out to be rather challenging for smaller companies, which will have to face a more competitive market. Considering that the past three years were far from being great when it came to constructions, the new forecast is encouraging and shows that this market niche is slowly recovering.
It seems that in spite of the cooling regulations adopted by the government, the value of the contracts that are going to be awarded this year is going to be rather impressive. Thus, it is expected for the total value to range anywhere between $27 and $32 billion. Out of the total demand forecast for this year, 60% should represent public contracts, as specialists say. Thus, the growth in this market should be between $16.5 and $19.5 billion. Having in mind that the total value of the contracts closed in 2018 was $30.5 billion, it is easy to see that there will be growth when it comes to the value of the contracts prepared for 2019, according to the statements released by the Building and Construction Authority or BCA.
At the BCA-Redas Built Environment and Property Prospects Seminar, which took place recently, the Minister of State for National Development and Manpower, Mr. Zaqy Mohamad, said that the predicted values mean that we can expect a growth of 23%, compared to what happened last year. Between the years 2015 and 2017, the majority of the companies unrolling activities in this sector felt the pressure of the decreasing demand. But, as the Government started to push public contracts with a value of approximately $1.4 billion, things started to look better for all of these companies. The unrolling of these contracts started in 2017 and are going to continue during this year as well.
The value of construction contracts is only expected to grow from now on. Thus, between 2020 and 2021, their value will range between $27 and $34 billion, while between 2022 and 2023 their value will go even higher, placing itself between $28 and $35 billion. Companies are already experiencing a turn in the tide. The executive director of Teambuild, for example, said that 2018 already brought in a higher number of contracts that 2017 did. At the moment, the company is involved in residential developments and also a nursing home. But, the same executive director said that even if things are improving for his company, there will still be some that will continue to find the coming period challenging. This is due to the fact that most of the projects are awarded to either foreign companies or large companies, rather than giving them to small local businesses. Thus, for the small businesses, the struggle may continue.
Still, the president of the Singapore Contractors Association, Mr. Kenneth Loo, said that small companies will have their slice of the pie, in spite of the fact that things won’t be too great for them. At the same time, the BCA announced significant changes concerning the Building Innovation Panel. If until recently this panel included just tech solutions, from now on it can be used for eco-friendly building technologies and construction materials for sustainable building processes.
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