he Building and Construction Authority (BCA) in its press release on 18 January 2021 reported that in 2020, total construction demand had contracted by 37 percent to S$21.04 billion, falling within BCA’s revised 2020 forecast of S$18 billion to S$23 billion. Public sector construction demand dropped from S$19.03 billion in 2019 to S$12.84 billion in 2020. Meanwhile, private sector construction demand decreased from S$14.5 billion in 2019 to S$8.2 billion in 2020, due to market uncertainties.
The reversal of modest growth from the preceding year was due to the outbreak of COVID-19 pandemic in 2020. With market uncertainties amid the COVID-19 induced economic recession, the construction industry was hit hard. At the peak of the outbreak in Singapore, an overwhelming majority of COVID-19 cases in Singapore were migrant workers, many of whom worked in the construction line. This meant that workers had to be placed under quarantine, essentially putting a stop to all construction work in Singapore. The negative impact of the COVID-19 pandemic on the global economy had also affected Singapore’s construction sector with a decrease in foreign direct investments due to low business sentiments globally.
Despite the economic headwinds and global uncertainties, Singapore remains upbeat about the construction demand in 2021 and beyond.
BCA expects construction demand to make a moderate recovery in 2021. The value of construction contracts is expected to hit between S$23 billion and S$28 billion, an improvement from preliminary estimates of S$21.3 billion in 2020 during the ongoing COVID-19 pandemic. This is largely supported by public sector demand, with a number of “major” infrastructure projects to be awarded this year. Furthermore, there is a backlog of remaining workloads impacted by the COVID-19 pandemic during 2020 waiting to be fulfilled.
Speaking at a Built Environment and Property Prospects Seminar 2021 on 18 January, National Development Minister Desmond Lee said the Government will contribute about 65 percent, valued at between S$15 billion and S$18 billion, of the overall construction demand this year. This sum is more than the S$12.84 billion worth of public sector projects from the previous year.
The public sector is expected to drive the construction demand, with an anticipated stronger demand for public housing and infrastructure projects. Some of the upcoming major public sector projects scheduled to be awarded this year include various contracts under the Jurong Region MRT Line, the Cross Island MRT Line Phase 1 and the Deep Tunnel Sewerage System Phase 2.
There will also be around S$6 billion worth of smaller public sector projects, which are less than S$100 million in contract value, such as cycling paths and upgrading works. “This is comparable with the annual average pre-COVID, and will benefit smaller and mid-sized contractors,” said Mr Lee.
For the private sector, construction demand is not expected to return to pre-COVID-19 levels yet, as investors are likely to remain cautious. With that consideration, construction demand in the private sector is projected to weigh in at S$8 billion and S$10 billion in 2021. The bulk of private sector construction demand is expected to come from developments of remaining en-bloc residential sites, major retrofitting of commercial developments as well as construction of high-specification industrial buildings to meet business needs.
Recovery on the Horizon
BCA predicts that sustained recovery in construction demand will strengthen between S$25 billion and S$32 billion from 2022 and 2025. This forecast has not taken into account potential new contracts for Changi Airport Terminal 5 and the expansion of the two Integrated Resorts, as these project timelines are still under review due to the pandemic disruptions.
The public sector is expected to lead the demand, contributing S$14 billion to S$18 billion per year from 2022 to 2025. Besides public residential developments, public sector construction demand over the medium term will continue to be supported by large infrastructure and institutional projects such as the Cross Island MRT Line (Phases 2 and 3), the Downtown Line Extension to Sungei Kadut, the cycling path networks, the relocation of Singapore Science Centre, the Toa Payoh Integrated Development, the Alexandra Hospital redevelopment and a new integrated hospital at Bedok.
In anticipation of a gradual recovery of the global economy, the successful deployment and effectiveness of COVID-19 treatment as well as the easing of lockdown restrictions, the private sector construction demand is expected to improve steadily in the medium term to reach between S$11 billion and S$14 billion per year from 2022 to 2025.
Forecast and Actual Construction Demand (To Date)
1 Excludes reclamation contracts
2 Based on BCA’s forecast released on 18 Jan 2021
3 Based on BCA’s medium term forecast released on 18 Jan 2021. The medium-term construction demand projection excludes any potential awards of construction contracts for the development of Changi Airport Terminal 5 (T5) and its associated infrastructure projects as well as expansion of Integrated Resorts (IRs) in view that their construction timelines are still under review due to impact of COVID-19 pandemic.
Although 2020 was particularly challenging for the built environment sector, the industry has shown great resilience. The COVID-19 pandemic has necessitated the industry to rethink the way Singapore builds to overcome the challenges.Post-COVID, BCA will accelerate the adoption of Design for Manufacturing and Assembly (DfMA) and Integrated Digital Delivery (IDD).
Below are some highlights of the year 2020 and 2021.
On 1 September 2020, Mr Desmond Lee, Minister for National Development and Minister-in-charge of Social Services Integration, announced a S$20 million Advanced Digital Solutions (ADS) scheme to fund integrated advanced digital solutions to keep worksites and workers safe.
The ADS solutions for the construction sector will help firms defray up to 80 percent of the costs of digital equipment such as thermal scanners, facial recognition systems, AI cameras and Bluetooth enabled wearables and their integration with site management solutions to assist in COVID-Safe worksite management, up to a cap of S$20,000 per project. These digital solutions when deployed at construction sites will be able to link up with BCA’s newly developed digital platform called the BuildSG-COVIDSafe platform (CSP) that will facilitate the exchange of data from on-site management platforms and equipment with other government databases to help firms ensure compliance of safe measurement measures. The CSP will also highlight irregularities for early intervention. Having completed its pilot testing, the CSP was rolled out for widespread adoption by the industry.
Mr Lee also announced the development of the Intelligent National Productivity and Quality Specifications (iNPQS) platform, a cloud-based system containing standard templates of project specifications co-created with industry partners for the industry. iNPQS contains standard specifications that can be adapted and customised by firms for their building projects, and have the ability to integrate with Building Information Modelling (BIM) technology. Traditionally, companies prepare their specifications for projects in accordance with the project’s requirements, a process which is often time-consuming. Having a standard set of base specifications not only speeds up drafting process, but also reduces abortive work and minimises conflicting requirements and discrepancies in specifications. The platform was set up in November 2020. Since then, it has reached out and benefited 30,000 consultants and allied professionals in Singapore’s building industry.
On 21 December 2020, BCA announced enhancements made to the Code of Practice (COP) on Buildability, to accelerate the adoption of DfMA technologies. DfMA helps to reduce the number of workers on-site, and makes on-site segregation of workers easier to adhere to safe management measures. The enhancement to the buildability framework which took effect on 28 December 2020, covered the revamping of Buildable Design Appraisal System (BDAS) to integrate DfMA technologies into each work discipline of Structural, Architectural and Mechanical, Electrical and Plumbing (MEP); the recalibration of new minimum B-Scores for all development types; and the extension of outcome-based option to all large development types in lieu of meeting the minimum B-Score.
To accelerate the adoption of DfMA technologies, BCA announced plans to raise the minimum B-scores for all industrial, commercial and institutional building projects with Gross Floor Area (GFA) of at least 25,000sqm from April 2022. This follows BCA’s raising of the requirements for large non-landed residential buildings in 2019, and is part of BCA’s efforts to establish DfMA as the mainstream building method for all large building projects, to promote more productive construction methods. Following this, all large projects will effectively be required to adopt suitable DfMA technologies for their respective typologies. For example, to meet the raised minimum B-scores, industrial and institutional developments can adopt Advanced Precast Concrete System (APCS), and commercial developments can adopt the structural steel system. The raised minimum B-scores will allow BCA to meet the 70 percent DfMA adoption target by 2025 or earlier.
On 18 January 2021, an initiative was kickstarted by Alliance for Action (AfA) on Digitalising Built Environment, which saw the introduction of a set of Data Standards for the Common Data Environment to facilitate more seamless information flow for building projects across digital platforms shared by various building professionals and companies along the value chain. While Data Standards specify what information is required for a building project and how it can be structured, project team members use the Common Data Environment to create, organise and share information from the data to foster collaboration, make timely decisions and take early interventions during the project’s delivery and building maintenance lifecycle.
On 4 March 2021, Ministry of National Development announced several key initiatives to further accelerate the transformation of the Built Environment (BE) sector and position the sector to emerge stronger and more resilient post-COVID. The initiatives include a refreshed Singapore Green Building Masterplan (SGBMP) to steer Singapore’s buildings towards higher sustainability standards, the introduction of a new Growth and Transformation Scheme (GTS) that adopts a value chain approach to transform the BE sector and the extension of the Construction Productivity and Capability Fund (CPCF) to provide continued support for the sector to transform as it recovers from COVID-19.
SGBMP is an action plan that sets out Singapore’s environmental sustainability ambitions for the Built Environment. It is part of the Singapore Green Plan 2030.
GTS will be introduced to support the formation of strategic alliances among progressive developers, builders and consultants across the construction value-chain. Each alliance will need to develop a minimum three-year business and transformation plan outlining strategies and initiatives to achieve transformation outcomes. These outcomes include demonstrating how productivity savings will be reaped through the use of DfMA and IDD technologies, and outlining how sustainability outcomes, capability building, workforce development, business growth and strategic collaboration will be delivered. This value chain approach, in which alliance members will be collectively responsible for the transformation outcomes, is intended to help alliance members forge long-term partnerships, reap mutual benefits and build up capabilities through knowledge sharing and transfer.
The CPCF offers various incentives to help firms adopt productive technologies and develop their workforce to raise construction productivity. About S$850 million was set aside for the CPCF, and BCA has disbursed close to two-thirds of the funding allocated since its introduction in 2010. Due to end in March 2021, the CPCF will be extended for another year, which will provide continued support for the industry to transform as the industry recovers from COVID-19. BCA announced that it would maintain 80 percent funding support for the Productivity Innovation Project (PIP) scheme from January 2021 until March 2022. Last year, the funding quantum for PIP was raised from 70 percent to 80 percent from 1 April to 31 December 2020. Maintaining this higher level of support until March 2022 will encourage firms to pursue longer term transformation despite the current challenges due to COVID-19.
Although the pandemic has presented significant challenges to the built environment sector, it can also turn into a window of opportunity to transform the sector and allow Singapore to emerge as a stronger society with a more resilient economy.
If there is a lesson to be learnt from the pandemic, it is the need to build in more resilience into the system and significantly reduce Singapore’s over-reliance on foreign guest workers. To that end, authorities will continue to push the adoption of digital technologies.