Singapore’s construction demand may reach S$60B this year, exceeding official projections: Maybank

SINGAPORE: Singapore’s construction demand is set to come in stronger than expected this year, with Maybank estimating the value of contracts likely to reach nearly S$60 billion, exceeding the official projections ranging between S$47 billion and S$53 billion, The Edge Singapore reported, citing the bank’s economists.

According to the bank’s estimate in its Sept 24 report, contracts in the first six months of the year had already reached S$27.7 billion, a 41% increase compared to the same period last year.

With both public and private sector projects making up roughly half each, the full-year tally is expected to push close to S$60 billion.

Last year’s total demand in the construction sector stood at S$44.2 billion, twice the over S$20 billion in contracts during the pandemic years.

Maybank noted in its report that the construction boom will be sustained by a post-pandemic backlog of HDB projects, mega-infrastructure projects such as Changi Airport Terminal 5 and Tuas Mega Port, as well as the expansion of the city-state’s integrated resorts, the Cross Island Line, the North-South Corridor — which includes a viaduct and a tunnel — and the Deep Tunnel Sewerage System.

“These mega projects alone could cost more than S$100 billion and last until 2030 or beyond,” it added.

The bank also mentioned the planned fivefold expansion of Woodlands Checkpoint, partly linked to the anticipated Johor–Singapore Special Economic Zone, adding to the demand. Meanwhile, commercial land sales, which have been lukewarm, could recover as interest rates ease, the bank said.

Maybank economists expect Singapore’s construction sector to grow more than 5% a year between 2025 and 2030, outpacing overall GDP growth, with construction’s share of GDP rising from 3.5% in 2024 to 4.2% this year.

Notably, construction stocks have already made significant gains amid anticipation of this upcycle.

Economists noted that every S$1 of construction demand generates about S$1.89 in total economic output. /TISG

Read also: Singapore’s construction activity remains strong despite it being among the most expensive markets in Southeast Asia at US$3,104 per sq m

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