Singapore’s construction sector is poised for significant growth, driven by major infrastructure projects such as Changi Airport Terminal 5 (T5), Tuas Mega Port, and the Marina Bay Sands expansion. These developments, coupled with falling material and labour costs, are expected to enhance profitability for contractors, according to a recent sector update.
Changi Airport Group has awarded contracts worth $4.2 billion (S$5.75 billion) for T5, marking a key milestone in Singapore’s infrastructure development. The contracts include a $728 million (S$999 million) deal with a Penta-Ocean-Koh Brothers joint venture for underground tunnels, a $2.8 billion (S$3.8 billion) substructure package with a China Communications Construction Company-Obayashi joint venture, and a $693 million (S$950 million) airside infrastructure package with Hwa Seng Builder.
The ongoing investment in large-scale projects provides a steady stream of opportunities for Singaporean companies. The T5 expansion alone accounts for $3.5 billion (S$4.75 billion) of the estimated $9.1 billion (S$12.5 billion) in awarded contracts. Additionally, the Tuas Mega Port and Marina Bay Sands expansion represent investments of $14.6 billion (S$20 billion) and $7.6 billion (S$10.4 billion), respectively.
Sustainability is also a key focus, with the Singapore government promoting initiatives like the Green Mark Certification Scheme and the Singapore Green Plan 2030. These initiatives encourage innovation and sustainability, offering companies a competitive edge and access to funding.
Material costs are forecast to decline by 1-13% year-on-year in Q2 2025, easing margin pressures for construction firms. Labour inflation has also decreased to 1.5% in 2024 from 9% in 2023, further supporting the sector’s positive outlook.
The construction sector’s growth is underpinned by stronger infrastructure spending and supportive green policies, maintaining an “OVERWEIGHT” rating. Key beneficiaries include companies like Hong Leong Asia and Tiong Woon Corporation Holdings, which are well-positioned to capitalise on the sector’s momentum.
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