Singapore market intelligence: set for growth
Our Singapore market intelligence report provides insight into the country’s construction sector which is set for continued growth in 2024.
This report focuses on how collaborative work may strengthen productivity and alleviate the effects from labour and rising construction cost challenges.
Stable economy spurs growth
Singapore’s construction industry is set for steady growth in 2024, underpinned by a stable economic environment. The nation’s Gross Domestic Product is expected to expand between 2 and 3 percent, with the construction sector likely to outpace this growth, driven by strong demand across public and private sectors.
Total construction demand is projected to reach between SGD$32bn and SGD$38bn, representing a significant 12 percent increase from 2023.
Tender prices and labour shortage drive construction sector collaboration
Tender prices are anticipated to increase by up to 5 percent in 2024, driven by inflationary pressures and ongoing supply chain disruptions. Labour shortages, worsened by regulatory changes and the residual effects of the COVID-19 pandemic, remain a significant concern. These shortages are likely to impact project timelines and contribute to the upward pressure on costs.
In response to these challenges, the construction sector is increasingly turning to digitalisation to enhance productivity and reduce reliance on manual labour. The adoption of productivity tools and platforms is seen as essential for streamlining workflows, improving communication and optimising resource allocation.
Singapore Budget introduces incentives for collaboration and competition
The 2024 government budget introduces key initiatives designed to support growth and enhance the competitiveness of Singapore’s construction sector. A central component of these initiatives is the introduction of new energy-efficient grants, intended to fund up to 70 percent of approved equipment costs, with larger projects potentially receiving up to SGD$530,000.
This push towards sustainability is strengthened by the extension of the Productivity Improvement Project scheme, which aims to drive greater technological innovation. Additionally, the adoption of the NEC4 contract, a suite of contracts for effective project management and collaboration, in several pilot projects is expected to bolster collaborative contracting practices.
Strategic government initiatives, coupled with a focus on innovation, collaboration and sustainability, will be key drivers of growth. However, success will require careful planning, agile responses to emerging challenges, and a commitment to continuous improvement in productivity and risk management.
