In a recent survey, Singapore’s construction market is named the fourth most expensive to build in, as it struggles with labour shortages and high production costs.
In the latest Turner & Townsend’s International Construction Market Survey 2021, amidst skilled labour shortages and increased material costs, Singapore’s construction market is now the fourth most expensive in Asia.
The survey stated that in Q1 this year construction output rose by 5% from Q4 in 2020, as construction in the region resumed. Unfortunately due to border restrictions placed due to Covid-19 on South Asian workers, building has now slowed and will most likely affect production for the remainder of the year.
As a result of reduced labour available in the region, the costs of mechanical and electrical work have now risen.
Furthermore, in Singapore, the prices of foundational construction materials, such as steel bars and cement, have risen by 36.2% and 6% respectively as of June 2021, since December 2020. Following global supply chain disruptions brought on by the ongoing pandemic, high demand materials are expected to continue to rise in cost, further disrupting the Singapore’s construction industry.
Construction contracts have declined by 0.1% from Q2, about $5.7 billion worth of contracts awarded in Q1 this year. And over 60% of these projects came from the public sector, working on residential, institutional, and some civil engineering projects.
Turner & Townsend predicted the public sector will continue to lead in building work for the remainder of the year, despite an increase in confirmed sites for the construction of private homes under the region’s Government Land Sales (GLS) Programme. The GLS Programme will likely come into play in the sector next year.
This ranking comes behind Tokyo, Hong Kong, and Macau in Asia, making Singapore’s construction market the 37th most expensive globally. Tokyo is ranked the most expensive city in the world to build in, with an average cost of US$4,001 per sq m, followed by Hong Kong at US$3,894 per sq m.
The Turner & Townsend survey took into consideration input costs, including labour and material, to lay out average building costs per square metre for construction required across different industries: residential, commercial, hotel, industrial and retail.