Singapore's public sector construction set to surge in 2016

SINGAPORE (Reuters) - Singapore's public sector construction demand is likely to account for nearly two-thirds of the value of all construction contracts to be awarded this year, the highest proportion in 14 years, the government said on Friday.

The expected ramp up in public sector projects comes after Singapore's economic growth slowed to 2.1 percent last year, the weakest in six years, hurt by a slowdown in China and sluggish global demand.

Total construction demand or the value of construction contracts to be awarded in 2016 is projected at S$27 billion ($18.77 billion) to S$34 billion, with about 65 percent driven by public sector demand, the Building and Construction Authority (BCA) said in a statement.

That would be the highest proportion of construction demand from the public sector since 2002, the BCA said.

Total construction demand last year was about S$27.2 billion, with public sector projects accounting for slightly more than half of the demand, it said.

The BCA said private sector construction demand is likely to slow this year due to less favourable economic conditions and an increased supply of completed private housing projects and offices.

The construction of the new National Cancer Centre, water reclamation and sewerage projects, improvement work on two expressways and package 2 of Changi Airport's 3-runway system, were among the key 2016 public sector projects cited by the BCA.

Average construction demand in 2017 and 2018 is expected to be S$26 billion to S$35 billion, and S$26 billion to S$37 billion in 2019 and 2020, the BCA said.

($1 = 1.4386 Singapore dollars)

(Reporting by Masayuki Kitano; Editing by Shri Navaratnam)