Shares of some construction companies surged last week on various announcements and a projected bright outlook.
Hock Lian Seng was up 12.9 per cent for the week, and Pan-United gained 11.6 per cent. Ley Choon Group rose 8 per cent in the same period, Huationg Global was up 7 per cent, and BRC Asia jumped 7.4 per cent.
Ley Choon on Jan 15 announced that four of its subsidiaries bagged a total of S$131.5 million for the supply and installation of underground utilities services, as well as road reinstatement works.
These projects are expected to be completed within 24 to 36 months, according to Ley Choon, and are not expected to have any material impact on the group’s earnings per share and net tangible assets per share for the financial year ending March.
Huationg’s chief executive officer and executive director Patrick Ng acquired 650,800 shares at an average price of S$0.162 a share. That increased his direct interest from about 7.9 per cent to around 8.3 per cent, bringing his total interest in the Catalist-listed company to 76.96 per cent.
Outlook for construction
A Building and Construction Authority (BCA) report released last week, which projected that medium-term construction demand is expected to remain strong in 2025, lent a further boost to the shares.
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The value of construction contracts is expected to range between S$47 billion and S$53 billion in nominal terms in 2025, according to BCA.
Normalised to real values, 2025’s demand is expected to range between S$35 billion and S$39 billion. That is between 0.3 and 11.7 per cent higher than pre-Covid levels in 2019, according to the authority.
Based on the contracts awarded in the past few years and the construction demand forecast for 2025, total nominal construction output is projected to increase to between S$39 billion and S$42 billion in 2025 – up from the preliminary estimate of about S$38.4 billion in 2024, it said.
“The anticipated uptrend is expected to be supported by the increase in actual construction demand over the last few years and the expected increase in 2025 construction demand,” it added.
Over the medium term, demand is expected to be robust as well. BCA expects the total construction demand to reach an average of between S$39 billion and S$46 billion a year from 2026 to 2029.
It said the strong demand is underpinned by the expected award of contracts for several large-scale developments, such as Changi Airport Terminal 5 and the expansion of the Marina Bay Sands integrated resort, alongside public housing development and upgrading works.
