Signs of life return to the construction sector
The main drivers for the economy are robust exports and solid manufacturing growth. Low unemployment and rising wages should prompt higher domestic consumption, although unwinding an oversupply in housing will take time.
Despite economic growth rising to 3.1 percent in late 2017, Singapore is struggling to sustain this level. Growth is expected to ease to 2.7 percent in 2018 and 2.6 percent in 2019.
The slump in construction since mid-2016 appears to have bottomed out and orders seem to be on the rise again. Public projects remain the largest construction sector and the Building and Construction Authority estimates that
between USD16bn and USD19bn worth of public projects will be awarded this year. Construction demand in the private sector is also expected to improve to between USD10bn and USD12bn this year, up from USD9bn in 2017.
In April 2016, the Maritime and Port Authority of Singapore began the first phase of a USD1.8bn mega-port terminal in Tuas. The port will consolidate all Singapore’s port operations. It will open in four phases, with the first berths expected to be operational in 2021.
|Cost escalation 2017–18:||2.0%|
|Cost escalation 2018–19:||2.0%|
|Location factor (USD):||65.0|
Government spending on infrastructure and public housing will continue to drive construction. Meanwhile, there are signs of increased activity from private housing, but the big impact of this will be felt after 2018 from major projects at Shundu Rd, Stirling Rd, Hougang and Upper Serangoon area.
This content is part of the International construction market survey 2018