Manpower Shortages and Supply Chain Disruptions Remain Key Concerns for Singapore Construction
Turner & Townsend’s August report for the Singapore Market Insight outlined that the country’s economy expanded by 1.3 percent in the first quarter of 2021 on a year-on-year basis, an improvement from the 2.4 percent contraction in the fourth quarter of 2020. The growth was driven primarily by the manufacturing, finance and insurance, and wholesale sectors.
The performance of Singapore’s construction sector, however, continues to be weighed down by declines in both public and private sector construction works. On a more positive note, although the construction sector contracted by 23.1 percent year-on-year, it showed gradual signs of improvement from preceding quarters.
Approximately SGD 5.7 billion worth of construction contracts were awarded in the first quarter of 2021, a marginal decline of 0.1 percent from the previous quarter. The report notes that the public sector is expected to lead most of the work demand for the remaining quarters of this year.
Construction output (certified progress payment), on the other hand, rose marginally by 5 percent compared to the fourth quarter of 2020, largely due to the resumption of more construction activities. However, border restrictions have slowed down onsite construction activities, which will impact construction output for the coming quarters.
Khoo Sze Boon, Managing Director – Singapore, Vietnam, and Philippines for Turner & Townsend comments: “Singapore’s construction market outlook is anticipated to remain uncertain in 2021. Although we could be seeing a gradual increase in terms of construction work demand (mainly driven by public sector projects), the overall market is still facing significant manpower shortages, supply chain constraints, and in particular escalating construction costs attributed to the current situation. There is also the need for the industry to further improve productivity to meet this growing demand.”
Download the latest Singapore Market Insight Report (August 2021) to see more economic data and insight, and to read about tender conditions in Singapore.
