Construction Cost Review

On 25 May 2026, the Ministry of Trade and Industry (MTI) announced that Singapore’s economy grew by 6.0% in the first quarter of 2026. Singapore’s GDP growth forecast for 2026 has been maintained at “2.0% to 4.0%”. As the Singapore construction market continues to operate with strong demand, ongoing geopolitical tensions in the Middle East have caused uncertainty in global energy and supply markets, contributing to potential cost pressures on fuel, transportation and construction materials. Taking these factors into account, the overall construction costs in Singapore are expected to increase by approximately 3% to 8% for the year 2026.

On 14 February 2025, the Ministry of Trade and Industry (MTI) announced that Singapore’s economy expanded by 5.0% on a year-on-year basis (4Q2023 to 4Q2024) and by 4.4% in 2024. The Singapore’s GDP growth for 2025 was forecasted at “1.0 to 3.0%” in February 2025 but MTI has further announced on 14 April 2025 that GDP growth forecast for 2025 has been downgraded to “0.0 to 2.0%”. Construction demand in Singapore significantly exceeds forecasts in 2024, reaching $44.2 billion. This surge was fueled by a combination of robust public institutional projects, steady public housing, accelerated private residential awards, and increased contract values.

On 22 November 2024, the Ministry of Trade and Industry (MTI) announced that Singapore’s economy expanded by 5.4% on a year-on-year basis (3Q2023 to 3Q2024), faster than the 3.0% growth in the second quarter. The Singapore’s GDP growth is projected to come in at “around 3.5%“ in 2024 and “1.0% to 3.0%” in 2025. Based on current market sentiment, Singapore's construction activity is expected to continue its upward trajectory, driven by a pipeline of public and private sector projects. This rising demand may likely lead to higher construction costs.

On 13 August 2024, the Ministry of Trade and Industry (MTI) announced that Singapore’s economy expanded by 2.9% on a year-on-year basis (2Q2023 to 2Q2024), extending the 3.0% in the previous quarter. The GDP growth forecast for 2024 has been narrowed to "2.0% to 3.0%", from "1.0% to 3.0%". Based on current market sentiment, Singapore's construction activities are expected to gain momentum with the continuous pipeline of public and private projects. This surge in demand is likely to drive construction costs upward.

On 23 May 2024, the Ministry of Trade and Industry (MTI) announced that Singapore’s economy grew by 2.7% on a year-on-year basis in 1Q2024, extending the 2.2% in the previous quarter. The GDP growth forecast is maintained at 1.0% and 3.0% in 2024. Construction prices in Singapore remained stable in the first quarter of 2024. Inflationary pressures and high interest rates persist, and it is unclear when these will ease, as the global economic outlook remains challenging. With an optimistic outlook for construction, driven by upcoming large-scale projects like Terminal 5 and two Integrated Resorts (IRs) expansion, construction prices are still expected to trend upward.

On 15 February 2024, the Ministry of Trade and Industry (MTI) announced that Singapore’s economy grew by 2.2% on a year-on-year basis in 4Q2023 and expanded by 1.1% in 2023. The GDP growth is forecasted to be between 1.0% and 3.0% in 2024. An analysis of recent Asia Infrastructure Solutions’ tender data showed that tender prices for 2023 have increased 1.5% year-on-year (i.e. 4th Quarter 2022 versus 4th Quarter 2023). Looking ahead, while the construction sector is likely to remain stable in 2024, it will face the same cost pressures as in 2023 due to persistent inflation and high interest rates.

On 22 November 2023, the Ministry of Trade and Industry (MTI) announced that Singapore’s economy grew by 1.1% on a year-on-year basis in 3Q2023. The GDP growth forecast for Singapore is projected to come in at around 1.0% in 2023 and between 1.0% and 3.0% in 2024. Looking ahead, the construction industry is likely to face persistent challenges in the months ahead, as the projected global growth slows due to ongoing geopolitical tensions, persistently high inflation, and elevated interest rates.

Tender prices for 2Q2023 have continued to be stable compared to 1Q2023. Despite the downward trend observed for some key material prices, labour costs remain high. Hence, tender prices for 2Q2023 have been maintained at a level similar to those of 1Q2023, attributed by the prevailing market uncertainty.

Tender prices in 1Q2023 have shown an increase compared to 4Q2022. The upward trend is primarily driven by the increase in material prices and labour costs. Looking ahead, key construction material prices are expected to remain stable, while labour costs are anticipated to continue increasing. The projected price movement for the next twelve months is estimated to range from +3% to +6%, depending on prevailing market sentiment and any potential adverse ramifications of current economic instability.