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The general operating environment is expected to remain challenging, amid global economic uncertainties and slowing economy of Singapore. The construction industry will continue to be supported by public sector projects going forward. The Building and Construction Authority ("BCA") estimated that total construction demand in 2017 is expected to be between S$28.0 billion and S$35.0 billion, higher than that achieved in 2016. Of this amount, public sector projects are expected to account for about 70% (1).
The precast business remains a beneficiary of government policies and projects where precast concrete components are used, such as Build-to-Order flats and MRT tunnelling works. Amidst competitive market conditions, the Group's Precast division has consolidated its operations at the precast yard at Batam and focus on productivity enhancement.
As at 31 December 2016, the Group's Construction and Precast divisions have outstanding order books of approximately S$134 million and S$90 million respectively.
(1) "Public sector construction demand is expected to increase this year", BCA, 6 January 2017