SINGAPORE (EDGEPROP) - Singapore’s construction sector logged a 10% y-o-y growth in 4Q2022, higher than the 8.1% growth registered in 3Q2022, according to data cited by Turner & Townsend. In its latest Singapore market intelligence report, the consultancy says the growth points to signs of strength and stability within the sector.

It forecasts the growth to continue, with total construction demand estimated to come in at between $27 billion and $32 billion this year, in line with projections by the Building and Construction Authority (BCA) in January. “Despite challenges and uncertainties, the construction industry will likely outpace the wider economy this year,” says Turner & Townsend.

Read also: Construction demand to reach $27 bil to $32 bil in 2023: BCA

The sector will be bolstered by pent-up demand for both public and private construction, including a robust pipeline for housing, redevelopment of old commercial premises and the recommencement of major projects that were halted during the pandemic. The bulk of anticipated construction work in 2023 is for residential, commercial, and infrastructure projects. (Find Singapore commercial properties with our commercial directory)

In addition, Singapore’s 2023 budget includes measures broadly aimed at increasing productivity – such as the $4 billion National Productivity Fund top-up, the new Enterprise Innovation Scheme, and the $1 billion boost to the Singapore Global Enterprises initiative – which will help refresh infrastructure and key construction priorities.

While the local construction sector has room to grow, Turner & Townsend highlights it remains vulnerable to global challenges such as high inflation and rising interest rates. “This uncertainty has resulted in construction costs remaining high despite a year-on-year decrease in prices for steel bars (13.9%) and concreting sand (1.7%), holding back a rebound in other types of construction projects,” adds the report.

To overcome headwinds and spur the industry’s rate of recovery, the consultancy calls for more investment in collaborative contracting, which promotes closer consultation among stakeholders.

“To prepare for the future and meet construction needs, better collaboration across the supply chain is critical in driving towards an advanced and integrated sector,” says Khoo Sze Boon, Turner & Townsend’s managing director for Singapore and Vietnam. “By embracing new ways of working, such as collaborative contracting, it could herald a new level of partnership and industry cooperation.”

Turner & Townsend notes that the government is already taking steps to encourage collaboration, with the BCA recently refreshing the Built Environment Industry Transformation Map (ITM) to combine the previous Construction and Real Estate (Facilities Management) ITMs into a single map focusing on a value-chain approach.

“Adopting the latest frameworks and technologies will help our industry improve efficiency and productivity, driving greater value into projects big and small across the city. To transform Singapore’s Built Environment for tomorrow, we need to drive collaborative contracting efforts today,” says Khoo.