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Summary

The construction sectors GDP grew by 2.5% year-on-year in the second


quarter, faster than the 1.1% growth in the previous quarter. On the other hand, the
total construction demand1 decreased by 31.8% year-on-year to $7.0 billion in the
second quarter, due to a reduction in the awards of both public and private sector
projects.
Average market prices for cement, granite, rebar and ready-mixed concrete
(G40 Pump) generally trended downwards compared to a quarter ago. Looking
ahead into the immediate next few months, prices for ready-mixed concrete (G40
Pump) and its raw materials are expected to remain competitive.

Latest Update
In the month of July 2015, preliminary average market prices of cement
(Ordinary Portland) in bulk and granite (20mm Aggregate) were $92.82 per tonne
and $19.23 per tonne respectively. Preliminary average price of ready-mixed concrete
(Grade 40 Pump) was $99.92 while that for steel rebar (16 to 32 mm High Tensile)
was $4904 per tonne in the same month.

All construction demand (contracts awarded) values stated in this article exclude reclamation projects.
Material prices included delivery to site cost.
3 Material prices excluded delivery to site cost.
4 With effect from Jan 2015, the market prices of rebar stated in the article are based on fixed price supply
contracts with contract period 1 year or less.
1
2

Detailed Review for Second Quarter 2015


CONSTRUCTION GDP
The Singapore economy grew by 1.8% on a year-on-year basis in the second quarter,
slower than the 2.8% growth in the previous quarter.5 The lacklustre performance was largely
due to a contraction in the manufacturing sector. The Ministry of Trade and Industry (MTI) has
also narrowed the GDP growth forecast for 2015 from 2%-4% to 2%-2.5%. On the other hand, the
construction sectors year-on-year growth expanded at a faster pace of 2.5% as compared to the
1.1% in the preceding quarter (Graph 1).
GRAPH 1: CONSTRUCTION GDP GROWTH RATES
16.0
14.0
12.0

% Change

10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
I

II

III

IV

2010

II

III

IV

II

2011

III

IV

2012

II

III

IV

2013

II

III

IV

2014

II

2015

Quarter

Despite a slightly higher year-on-year growth in the construction sector as compared to a


quarter ago, its share of economic GDP fell slightly to 4.7% as compared to the 4.8% in the
previous quarter (Graph 2).
GRAPH 2: CONSTRUCTION GDP CONTRIBUTIONS
5.0
4.9
4.8

% Share

4.7
4.6
4.5
4.4
4.3
4.2
4.1
4.0
I

II

III

2010

IV

II

III

IV

II

2011

III

IV

2012
Quarter

Economic Survey of Singapore Second Quarter 2015

II

III

2013

IV

II

III

2014

IV

II

2015

CONSTRUCTION DEMAND (CONTRACTS AWARDED)


On a year-on-year basis, total construction demand decreased by 31.8% to $7.0 billion in
the second quarter due to a fall in construction demand from both the public and private sector.
With the exception of public industrial and private institutional developments, the total values of
contracts awarded for all other public and private development types were lower as compared to
the corresponding period a year ago (Graph 3 and Table 1).
GRAPH 3: CONSTRUCTION DEMAND
(IN TERMS OF CONTRACTS AWARDED)
12,000

$ Million

10,000
8,000
6,000
4,000
2,000
0
I

II

III

IV

2010

II

III

IV

II

2011

III

IV

2012
Quarter
Total

Public

II

III

IV

2013

II

III

2014

IV

II

2015

Private

TABLE 1: YEAR-ON-YEAR CHANGE IN CONSTRUCTION DEMAND

Construction Demand
2014Q2
($m)

2015Q2
($m)

Year-on-Year
Change
(%)

Both Sectors

10,278.24

7,009.11

-31.81

Public Sector
Residential
Commercial
Industrial
Institutional & Others
Civil Engineering

5,883.94
1,247.78
68.77
30.96
1,459.77
3,076.67

3,649.82
458.50
14.28
476.26
732.55
1,968.24

-37.97
-63.26
-79.24
1,438.51
-49.82
-36.03

Private Sector
Residential
Commercial
Industrial
Institutional & Others
Civil Engineering

4,394.30
1,825.81
539.06
1,628.27
177.30
223.87

3,359.29
1,291.81
245.62
1,093.24
652.82
75.80

-23.55
-29.25
-54.43
-32.86
268.21
-66.14

Development Type

On a quarter-on-quarter basis, both public and private sector construction demands


were also lower and resulted in a 12.1% reduction in total construction demand in the second
quarter (Table 2).

TABLE 2: QUARTERLY CONSTRUCTION DEMAND

Construction Demand
Development Type

2014Q4
($m)

2015Q1
($m)

2015Q2
($m)

Both Sectors

9,070.71

7,972.05

7,009.11

Public Sector
Residential
Commercial
Industrial
Institutional & Others
Civil Engineering

3,410.93
756.12
0.62
91.07
933.02
1,630.10

4,126.32
1,572.97
29.27
225.62
1,763.02
535.45

3,649.82
458.50
14.28
476.26
732.55
1,968.24

Private Sector
Residential
Commercial
Industrial
Institutional & Others
Civil Engineering

5,659.78
1,563.61
2,020.86
1,662.65
193.51
219.15

3,845.73
1,210.15
756.76
1,152.79
545.41
180.61

3,359.29
1,291.81
245.62
1,093.24
652.82
75.80

Public Sector
Following a strong quarterly demand in the first quarter, public sector residential
construction demand slowed down to $459 million in the second quarter. The few new public
housing projects awarded in the second quarter comprised of 1,974 housing units to be built in
areas such as Hougang, Yishun, Dawson and Jurong East.
The construction demand for all other building types with the exception of industrial
developments, declined both quarter-on-quarter and year-on-year. In particular, on the back of a
high base in which $1.8 billion worth of contracts were awarded in the first quarter, institutional
construction demand fell to $733 million in the second quarter. On the other hand, the demand
for industrial developments increased to $476 million in the second quarter, supported by
projects such as JTC Space @ Tuas, JTC Chemicals hub at Tuas View and JTC Nanospace @
Tampines.
By contrast, civil engineering construction demand increased more than three-fold in the
second quarter to $2.0 billion as compared to the $535 million recorded in the preceding quarter.
The significant increase was fuelled by projects such as advanced works at Changi Depot,
expansion of KPE/TPE Interchange, improvement works to Bukit Timah First Diversion Canal
and earthworks at Gali Batu.

Private Sector
On a year-on-year basis, the total private sector construction demand fell by 23.6% in the
second quarter due to a reduction in total construction demand for residential, commercial,
industrial and civil engineering developments. Similarly, the declining demands for commercial,
industrial and civil engineering developments continued into the second quarter and weighed
down total construction demand by 12.7% on a quarter-on-quarter basis.
In the second quarter, the construction demands for residential developments and
institutional & other building works registered quarter-on-quarter increases of 6.8% and 19.7%
respectively. The increases were supported by major projects such as High Park Residences at

Fernvale Road, Sims Urban Oasis at Sims Drive, Parc Life at Sembawang Crescent and addition
and alteration works to Changi Airport Terminal 1. However, compared to the corresponding
period a year ago, the construction demand for residential devleopments recorded a 29.3%
reduction.
On the other hand, the demands for commercial and industrial developments fell by
54.4% and 32.9% to $246 million and $1.1 billion respectively in the second quarter as compared
to a year ago. The major projects awarded during the second quarter included the reconstruction
of Intercontinental Hotel at Nanson Road, Mega@Woodlands at Woodlands Close and Telin
Jurong Data Centre 3 at Sunview Drive. Additionally, the private sector construction demand
was also adversely affected by civil engineering projects which fell significantly in the second
quarter to $76 million, one of the lowest level of demand since 2010.

LATEST UPDATE ON CONSTRUCTION DEMAND FORECAST FOR 2015


Based on the actual construction demand in the first 5 months of this year and the latest
feedback from the public sector agencies and private sector developers, the construction demand
forecast for 2015 is expected to stay between $29 billion and $36 billion, same as the original
forecast announced in January this year. Although the revised total demand forecast for 2015
remains the same, there is some adjustment in both the public and private sector demands. The
public sector construction demand is expected to reduce from the earlier projected $18b-$21b to
$16b-$19.5b while the private sectors demand will increase from $11b-$15b to $13b-$16.5b. The
shortfall in the earlier projected public sector construction demand is likely to be offset by the
increase in private sectors construction demand (Table 3).
TABLE 3: REVISED CONSTRUCTION DEMAND FORECAST FOR 2015 (MID-YEAR REVIEW)

Construction Demand
Development Type

Public
($b)

Private
($b)

Total
($b)

Total

16.0 - 19.5

13.0 16.5

29.0 - 36.0

Building
Residential
Commercial
Industrial
Institutional & Others

9.0 - 10.5
3.2 - 3.5
0.2
1.0 1.4
4.6 5.5

11.8 13.2
3.9 4.4
2.7 3.0
3.7 4.0
1.5 1.7

20.8 - 23.7
7.1 - 7.9
2.9 3.2
4.7 5.4
6.1- 7.3

Civil Engineering

7.0 9.0

1.2 3.3

8.3 12.3

CONSTRUCTION VOLUME (PROGRESS PAYMENTS)


Total nominal construction output registered a 1.8% increase year-on-year to $8.8 billion in
the second quarter, supported by a pick-up in on-site construction activities from the public
sector; in particular, civil engineering works (Graph 4).

GRAPH 4: CONSTRUCTION VOLUME


(IN TERMS OF CERTIFIED PROGRESS PAYMENTS)
10,000
9,000

$ Million

8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
I

II

III

IV

2010

II

III

IV

2011

II

III

IV

2012

II

III

IV

2013

II

III

2014

IV

II*

2015

Quarter

* - preliminary data

Total

Public

Private

The public sectors total construction output expanded by 5.6% and 14.9% quarter-onquarter and year-on-year respectively and reached $3.9 billion in the second quarter. Most of the
growth stemmed from civil engineering works such as the land preparation works for Changi
Airport development and various contracts for the Thomson-East Coast MRT Line (TEL). Other
projects which lent support to the public sector construction output included Phase 3 of the
Liquefied Natural Gas (LNG) Terminal at Jurong Island, Fusionopolis 2A, Yishun Community
Hospital and Sengkang General/Community Hospital.
Total private sector construction output fell as compared to a year ago but increased
slightly quarter-on-quarter and reached $4.9 billion in the second quarter. The slight growth was
mainly due to an increase in industrial construction output, supported by projects such as
Mapletree Business City II at Alexandra Terrace and various Engineering, Procurement and
Construction (EPC) projects. Similar to past trend, residential building construction output
accounted for the largest share of the overall private sector construction activities, backed by ongoing condominium developments such as Watertown & Waterway Point at Punggol Central,
Corals at Keppel Bay at Keppel Bay Drive, Seletar Park Residence at Seletar Road and La Fiesta at
Sengkang Square.

CONSTRUCTION MATERIALS
Quarterly demands for cement and rebar decreased in the second quarter. On the other
hand, the demands for granite and ready-mixed concrete (G40 pump) were higher in the second
quarter as compared to the preceding quarter. The average market prices of all of the key
construction materials had softened further as compared to a quarter ago. Moving forward, the
market prices of ready-mixed concrete and its raw materials are expected to remain competitive
while that of steel rebars is anticipated to continue the prolonged downtrend.
Cement
Demand and Supply
Demand for cement decreased by 5.4% quarter-on-quarter to 1.4 million tonnes (Graph 5).
Almost all of the cement demand was supported by imports, with sources from Japan (60%),
China (19%), Malaysia (11%), Taiwan (6%), Vietnam (3%) and South Korea (1%).

GRAPH 5: DEMAND FOR CEMENT


1,800
1,600
1,400

('000 tonnes)

1,200
1,000
800
600
400
200
0
I

II

III

IV

2010

II

III

IV

2011

II

III

IV

2012

II

III

IV

2013

II

III

IV

2014

II

2015

Quarter

Prices
Average market price of bulk cement (with delivery) decreased from $94.30 per tonne in
March 2015 to $93.00 per tonne in June 2015. Cement prices are likely to remain competitive in the
coming months.
Granite
Demand and Supply
Demand for granite increased by 3.1% quarter-on-quarter to 5.5 million tonnes (Graph 6).
Malaysia and Indonesia remained as the key sources of granite imports.
GRAPH 6: DEMAND FOR GRANITE
7,000
6,000

('000 tonnes)

5,000
4,000
3,000
2,000
1,000
0
I

II

III

2010

IV

II

III

2011

IV

II

III

IV

2012
Quarter

II

III

2013

IV

II

III

2014

IV

II

2015

Prices
Average market price of 20mm granite decreased from $21.00 per tonne in March 2015 to
$19.90 per tonne in June 2015. The average price for 20mm granite is expected to remain
competitive in the coming months.
Ready-Mixed Concrete
Demand and Supply
Demand for ready-mixed concrete increased by 1.7% quarter-on-quarter to 4.1 million
cubic metres (Graph 7).
GRAPH 7: DEMAND FOR READY-MIXED CONCRETE
4,500
4,000

('000 cubic metres)

3,500
3,000
2,500
2,000
1,500
1,000
500
0
I

II

III

IV

2010

II

III

2011

IV

II

III

IV

2012

II

III

IV

2013

II

III

2014

IV

II

2015

Quarter

Prices
Average market price of ready-mixed concrete (Grade 40 Pump with delivery) decreased
from $100.50 per cubic metre in March 2015 to $99.90 per cubic metre in June 2015. The average
price for ready-mixed concrete (G40 Pump) is expected to remain competitive in the coming
months.

Steel Reinforcement Bars


Demand and Supply
Following the surge in the previous quarter, the demand6 for steel reinforcement bars
(rebars) moderated by 8.5% quarter-on-quarter to 0.55 million tonnes. Nevertheless, it still
maintained a relatively high demand level as compared to historical trend (Graph 8). Similar to
previous quarters, China continued to dominate the import sources, accounting for 96% of the
total imports.

Demand for steel rebar is measured in terms of local production and net imports.

GRAPH 8: DEMAND FOR STEEL REINFORCEMENT BARS


700
600

('000 tonnes)

500
400
300
200
100
0
I

II

III

2010

IV

II

III

2011

IV

II

III

IV

2012

II

III

2013

IV

II

III

2014

IV

II

2015

Quarter

Prices
The average market price for 16 to 32 mm high tensile rebars continued to drop from
$565.50 per tonne in March 2015 to $506.60 per tonne in June 2015. Some analysts view that
Chinas reduced steel production in preparation for the celebration of the 70th anniversary of the
end of the World War II is unlikely to end the price downtrend amid the prevailing severe
capacity glut and devaluation of yuan currency.

26 August 2015
BUILDING AND CONSTRUCTION AUTHORITY