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Singapore construction markets, key trends and opportunities

Heaptalk Team, economy . 03 Aug 2021
Singapore housing - heaptalk property

Heaptalk, Singapore – The Construction sector is one of the most hit sector as a result of the Covid-19 Pandemic in Singapore. Currently the construction sector relies heavily on imports, both manpower and materials. Travel restrictions and border closures have resulted in manpower shortages and logistic access to construction materials have been delayed. Companies have been stretched thin financially due to delayed project timeline completion.

The government have been proactively trying to bring in foreign labors into the country in order to support the current demand but the number of manpower inflows barely scratch what is needed. To aid the recovery of the construction industry, the government announced an SGD1.4 billion (US$1.06 million) construction support package in June 2020, which includes an SGD525.8 million (US$398.8 million) construction restart booster to assist construction firms in meeting additional compliance costs as a result of enhanced social distancing measures.

In the most recent budget, published in April 2021, the government promised an extra fiscal package of SGD11 billion (US$8.3 billion). According to the finance minister, about SGD4.8 billion (US$3.6 billion) is allocated for public health and safe reopening measures such as vaccines, contract tracing, and testing capabilities. The government also expanded numerous existing programs to subsidize salaries and grant company financial assistance.

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After shrinking by 35.9 percent in 2020, Singapore’s construction sector is expected to recover by 30 percent by 2021. The industry is expected to increase further in 2022, with real growth of 8.1 percent, and then by 3.3 percent for the rest of the projection period (2023-2025).

The government’s initiatives to encourage the construction of affordable housing, transportation, and renewable energy infrastructure are anticipated to continue to assist the industry’s growth in the future years.

In addition to financial assistance and other initiatives, digital transformation of the industry should be accelerated to increase workers productivity and reduce the reliance on foreign labor. The industry need to adopt new improved ways in running their daily business process and adopt less paper based process in order to effectively gain insights and data from the field.