Construction Pickup in 2020 and 2021: What to expect?

2020 has been a tough year for Singapore’s economy, and the construction sector is no exception. With the impact of Covid-19 still being felt 9 months after it’s inception in Singapore, it’s no surprise that the construction service industry took a hit, and a predicted $10-billion one at that. Between the many outbreaks of Covid-19 cases in dormitories housing 40 thousand construction workers, many who are foreign workers, the cessation of work on ongoing construction projects until further notice and the dwindling demand for construction projects, it’s not hard to see why the construction sector is one of the hardest-hit industries.

Construction service being done on a building complex

While the Building and Construction Authority (BCA) had predicted the construction demand forecast of 2020 to be around $28 billion to $33 billion for the year in January, it has revised this forecast in light of the current situation to be around $18 billion to $23 billion during BCA’s mid-year review. The construction sector is divided into 2 sectors, the public and private sectors and 2020’s forecast for public sector contracts is $11 billion to $14 billion while the private sector is $7 billion to $9 billion. This is a significant drop compared to 2019’s contract value of $19 billion in the public sector and $14 billion in the private sector. 

Just in the first half of 2020, 40 thousand out of 47 thousand Covid-19 cases are from dormitories. During this period, almost all work on construction services were halted during the circuit breaker period when dormitory outbreaks were still prominent. With the many outbreaks in several dormitories and the inability to perform any sort of construction training, the construction sector saw one of the largest declines in employment.

Construction worker working on steel beams

However, there is a silver lining to this as the BCA has predicted that the demand for construction service should recover to a degree in 2021. With many unfinished public sector projects and the planned construction of many new public sector projects like new medical facilities and infrastructure projects like the Cross Island MRT line to support demand, the construction sector is poised to rebound. The BCA has also placed utmost importance on vigilance and taking proper measures to prevent a resurgence of Covid-19 cases in dormitories which threatens to grind the industry to a halt again.

Construction service being done on an MRT rail

This does not mean that things will necessarily return to the way they once were. Desmond Lee, the Minister of National Development recently stated that the need for the construction sector to acquire proper sustainable business development. He also stated a new planning and coordination plan to improve business continuity and the importance technology and digitization will play in doing so be it through online training, utilizing 3D technologies to plan and visualize or other means.

He also stated that the BCA and other Government agencies will continue to reach out to provide assistance in various ways, including financial assistance to help construction companies tide through this period of unrest. Despite all the setbacks the construction service industry is facing in the wake of Covid-19, it seems like major changes are on its way and that the construction sector is poised to make a comeback in the following years.

For our partners and customers in the construction, oil & gas and marine industries, have you sent your staff to the relevant training already? Have you benefited from the reduction in the foreign workers’ levies? Do call us to find out more about the Multi-Skilling & CoreTrade scheme if you haven’t.

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