Wednesday 29 December 2021

Riding the Recovery of the Construction Sector- Hock Lian Seng

With Covid 19 causing huge disruption to the economy, the construction sector was especially affected given the migrant workers' high infection rate. But, things are starting to look brighter, with the government getting things back to normalcy. With the live with the covid directive, most migrant workers will be able to go back to work as long as they get vaccinated
 
Given the BCA guidance, things are starting to be turning up based on the contracts awarded. You could find the latest Building and Construction Authority forecast appended below. This could be due to pent up demand, given news of BTO delays. Moreover, the government's initiative to boost up infrastructure spending to jumpstart the economy post covid would also provide a further tailwind.
 
 

Source: BCA Media Release Jan 2021

 

Giving some context, the total contracts awarded in 2019 was in the region of 33 billion. The general forecasted contracts from 2014 to 2019 was also higher than the current forecasted contract values for the next few years.
 
But, things are moving rapidly and any forecast could be derailed or even surpassed. Nonetheless, one thing is for sure, the figures are likely going to be higher than 2020 which bear the full brunt of the pandemic.
 
Also, the trump card would be the contracts for Changi Airport Terminal 5 and the Integrated Resorts expansion, which have been excluded from the forecast.


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