Sunshine for Singapore Construction Industry after Circuit Breaker?

Singapore reported 728 new cases as of 16 Apr 20, an exponential rise from previous day cases of 447 new cases. Major cases are arising from dormitories. It remains the toughest challenge for the government to control and contain the outbreak of the virus. Currently, there are around 17 foreign worker dormitories already being gazetted as isolation areas under the Infectious Diseases Act, according to notices by the Singapore Ministry of Health (MOH) in the Government Gazette.  The total number of foreign workers linked to dorms who have tested positive for Covid-19 is 2,689 - about 60 percent of all Singapore's cases.

As the novel coronavirus pandemic continues to unfold, the construction industry is expected to be hammered in Q2 2020 from the Covid-19 pandemic, first from the one-month circuit breaker period and the rising infections/quarantines at foreign workers dormitories, which thwarted them from working as well as the demand shock arising from weak business and consumer confidence amid recessionary fears which could impact public and private sector demand for real estate.

Let's re-look at how is the construction industry in Singapore performing all this while?

The construction sector had reached its peak in the year 2015 and go into a slow down mood until 2018. In the last year 2019, the total value of the construction contract awarded was S$33.5 billion, showing a recovery from the bottom since then. Out of the total contract issued, 56% is from the public sector while 44% is from the private sector.   

BCA is further projecting a growing demand in 2020 and expected of continuing pickup up to 2024. With all this projection and good sentiment, seem like the construction sector is back on track in Singapore.

However, COVID-19 strikes from nowhere and pushes the pause button in most of the countries and Singapore is not an exceptional case. The construction which classified as non-essential takes a big hit from the circuit breaker imposed by the Singapore government.

According to a Business Times interview with some chief economists, the construction sector is expected to take a big hit in Q2 2020 due to the pandemic. With the continuing rising COVID-19 cases in Singapore, the impact may be in the prolongation period. When it is safe to resume activity, public sector infrastructure projects are likely to be stepped up to kickstart the Singapore economy, but that may be a late-2020 or even 2021 story. 

So, can the construction rebound and resume immediately after the circuit breaker?

It is still a big question mark. At least, there are few challenges ahead after Covid-19:

1. Will the circuit breaker period extended further looking at the current situation?
2. Will the virus outbreak among the foreign workers be contained?
3. Even it resumes back to work, how is the mentality of the workers? Are they feel safe to work?
4. Safe distancing practice is expected to continue even after the circuit breaker, how are the contractors implement the safe distancing of 1 meter for work? And are contractors able to maintain a key performance index in productivity?
5. Can the supplier resume production back to normal prior to supplying the material to construction sites?
6. Some contractors might face liquidity cash flow in order to sustain their companies. What further measure from the government to restart the engine?
7. Are we facing a workers crunch after that where some of the foreign workers will continue to be placed in isolation? International travel restrictions mean we cannot import workers anymore.
8. Expected of lower demand for property ahead which cause a slow down in construction and property prices for the long term?

Let's keep the faith with Singapore government will do its best endeavor to control and contain the virus outbreak and will take necessary prudent measures to support enterprises to resume work whenever the situation allows. Of course, take good care of our fellow friends from other countries. 

Want to know how important is construction sector to Singapore? Check it out here: http://antbuildz.com/blog?id=5e93edcc3968b1097cea5b2b