Public sector projects like civil engineering and public housing continue to support the local construction sector.
Singapore is still the third most expensive city for construction in Asia, behind Hong Kong and Macau, revealed the latest International Construction Costs Index published by Arcadis, a leading global design and consultancy firm for natural and built assets.
Globally, Singapore slipped five spots from last year, making the city-state the world’s 15th most expensive city to build in.
Arcadis noted that Singapore’s construction market has witnessed continuous correction since 2014, on the back of a slowing economy and oversupply situation.
As such, this year’s output forecast is estimated to range between US$27 billion and US$32 billion, representing a stable market following a steep correction.
With sustained workload in the public sector, like civil engineering and public housing supporting the construction industry during the correction, prices remained broadly stable, it said.
“With (the) Singapore government’s continued investment in infrastructure through projects such as Changi East Development, PUB’s Deep Tunnel Sewerage System (DTSS) and (the) Singapore to Kuala Lumpur High Speed Rail, the construction industry in Singapore will remain positive with a forecast output of two percent increment per year,” said Tim Risbridger, Arcadis’ Country Head for Singapore.
“However, it is not without challenges. Among them, a shortage in both labour and expertise could potentially hinder productivity if not being addressed effectively. We believe investment in technology and initiatives which will increase industry productivity, are essential in order to meet the challenges in the coming years.”
Meanwhile, growth rates in most Asian construction markets eased significantly during the last 18 months primarily due to the peak in residential and commercial development rates.
With this, “expansion at around five to seven percent per year is the best prospect for many construction markets in Asia”, said Arcadis.