Managing Demand in Construction Sector Caused by Project Delays

Mr Liang Eng Hwa asked the Minister for National Development (a) what is the current state of demand in the construction sector and the extent of project delays and postponements; (b) whether the construction capacity has fully recovered; and (c) whether there will be sufficient capacity to meet additional demand due to backlogs from delayed projects.

BCA projects that construction demand will be $18 to $23 billion this year, $10 billion lower than the forecast in January. COVID-19 has caused some delays to ongoing construction projects, and firms are facing some loss in productivity due to the need to adopt COVID-Safe measures on-site. That said, almost all projects and workers have resumed work. We expect construction demand to recover to some extent in 2021, supported by demand from public sector projects.

We understand that this is a difficult period for firms in the construction sector, and the Government has provided significant support under the Jobs Support Scheme and foreign worker levy waiver and rebates, in addition to the $1.36 billion Construction Support Package, to help construction firms tide through this period. We are mindful of the need to preserve industry capacity. For instance, we are working closely with the Singapore Contractors Association Limited (SCAL) to facilitate migrant workers whose work permits are expiring to continue working in Singapore. As the COVID-19 situation improves in certain countries, we are selectively allowing more construction work pass holders who were overseas to return to Singapore, subject to the appropriate public health management measures. MOM has also started accepting new work pass applications from countries with lower health risks. In addition, we are studying how to facilitate the entry of more work pass holders, while minimising public health risks.

We will continue to closely monitor the impact of the pandemic on the sector, and also help companies to transform and be less reliant on low cost manpower, so that the sector can emerge stronger.