Singapore’s construction sector is expected to reach pre-pandemic activity levels this year after recording 2.9% year-on-year growth in the fourth quarter of 2021.
A study by British consultant Turner & Townsend notes that the Building and Construction Authority of Singapore has forecast demand of up to $23 billion in 2022.
However, the construction sector could be hampered by a long-term labor shortage, a factor which was only slightly mitigated by the government’s worker retention program, implemented between September 2021 and February 2022. This is partly caused by the high cost of recruiting migrants. workers, due to the continuing risks posed by Covid-19.
The sector has also been affected by rising oil prices and the disruption of global supply chains, which have increased the cost of materials, machinery and transportation. Overall, tender prices are expected to increase between 5% and 8% across the sector in 2022.
Khoo Sze Boon, Managing Director of Turner & Townsend in Singapore, Vietnam and the Philippines, said: “We recognize that a level of uncertainty is not just anticipated but expected in today’s world. We see Singapore’s construction sector on a steady path to recovery, with the private sector ready to follow public sector investment in due course.
“Over the long term, building the resilience of the construction sector through sustained collaboration with industry, digitalization and technological innovation will be key to its ability to withstand and respond effectively to major market changes. “
Turner and Townsend Singapore Market Information Report – April 2022 is available here.
