Overview
Singapore's construction industry is set to continue with a strong pace of growth, alongside a stable economy
With a moderate economic growth forecast for Singapore's economy, the construction industry looks set to outpace GDP growth. Amid ongoing challenges, economic growth for the country is pegged at a moderate 2.0 to 3.0 percent, while demand in the construction sector is set to reach between S$32bn and S$38bn, a 12 percent increase over 2023.
GDP growth in 2024 will continue to come from tourism and aviation-related sectors as well as manufacturing sectors, despite persistent economic challenges. The construction sector will continue to benefit from public sector projects, with key investments in residential and civil infrastructure and renewed activity in delayed projects.
Private sector construction demand remains strong, as a whole, with commercial development promising a strong growth horizon, while residential and industrial development is anticipated to be more subdued compared to 2023.
The industry will continue to face key challenges, including skilled labor shortages, especially due to regulatory changes through the DRC (Dependency Ceiling Ratio), which limits the ratio of foreign employees to total workforce strength in companies and will worsen the labor shortage in the Built Environment (BE) industry.
The recent built environment initiatives driven by the Building and Construction Authority (BCA) promises accelerated growth through new funding schemes
The policy updates and investment focus in the 2024 budget underscores the government's determination to propel growth for the construction sector. The expansion of Contractors Registration System (CRS) to be a unified nationwide registry system aids in the future transformation of the BE sector by standardising requirements across public and private sector projects.
Increased funding opportunities across sustainability initiatives, financing options for companies and technology advancement will spur further spending in the sector.
The adoption of the NEC4 contract, a suite of modern construction and engineering contracts to facilitate effective project management and collaboration, also highlights the government's continued intent to embrace newer collaborative contracting models to unlock cost efficiencies and enhance construction capabilities for the sector.
