Singapore’s construction sector is expected to stay strong in 2026, supported by public sector demand and major infrastructure projects, even as geopolitical tensions and supply chain disruptions raise cost pressures, according to the Singapore Construction Market Review and Outlook 2026 released by SJ Group’s Project and Cost Management business unit.
Ho Kong Mo, Senior Executive Director for Project and Cost Management at SJ Group, said, “Singapore’s built environment sector has once again demonstrated its resilience and adaptability. Even as global uncertainties drive cost pressures, a steady pipeline of public sector projects and continued infrastructure investment will underpin demand. Additionally, the Building and Construction Authority announced a shift from mandatory overseas skills testing to local testing in Singapore, starting progressively from January 2027, to ease prevailing constraints in the foreign worker market- thereby shortening the hiring timeline by approximately two to three months.”
He added, “Strengthening project management and accelerating productivity through technology adoption will enable the industry to manage costs, navigate current headwinds, and support long-term growth.”
Total construction demand is projected to hold at S$7 billion to S$53 billion this year, after reaching S$50.5 billion in 2025, driven largely by infrastructure and institutional projects. However, cost pressures are set to rise. The report forecasts construction costs to increase by 2 to 5 percent in 2026, with material prices already up by 5 to 15 percent amid disruptions linked to tensions in the Middle East. Oil prices exceeding U$100 per barrel and continued supply chain volatility are expected to further strain project costs and timelines.
The outlook for the construction sector remains underpinned by major developments, including works for Changi Airport Terminal 5, MRT expansions and healthcare projects. Civil engineering demand alone is expected to rise to between S$11.6 billion and S$13.4 billion this year. In the residential segment, demand is expected to ease slightly, with public housing construction easing from last year’s peak. Around 19,600 Build-To-Order flats are slated for launch in 2026, while private sector activity will be supported by a steady pipeline of Government Land Sales sites.
Meanwhile, demand in the commercial segment is projected to rise to between S$6.1 billion
and S$6.7 billion after a weak 2025, led by projects such as the Marina Bay Sands expansion. Industrial demand is expected to remain supported by growth in advanced manufacturing and data centres, particularly in artificial intelligence-related sectors.
