Construction Cost Review

It is crucial to have the ability and budget accurately for a construction project. A consistent cash flow and a comprehensive understanding of market operations can make all the difference between breaking even, making a profit or even exceeding the budget.

Asia Infrastructure Solutions is pleased to offer a Construction Cost Review, which aims to keep you informed of the latest costs and trends in Singapore.

Construction Cost Review 4Q2023

On 15 February 2024, the Ministry of Trade and Industry (MTI) announced that Singapore’s economy grew by 2.2% on a year-on-year basis in 4Q2023 and expanded by 1.1% in 2023. The GDP growth is forecasted to be between 1.0% and 3.0% in 2024. An analysis of recent Asia Infrastructure Solutions’ tender data showed that tender prices for 2023 have increased 1.5% year-on-year (i.e. 4th Quarter 2022 versus 4th Quarter 2023). Looking ahead, while the construction sector is likely to remain stable in 2024, it will face the same cost pressures as in 2023 due to persistent inflation and high interest rates.

Construction Cost Review 3Q2023

On 22 November 2023, the Ministry of Trade and Industry (MTI) announced that Singapore’s economy grew by 1.1% on a year-on-year basis in 3Q2023. The GDP growth forecast for Singapore is projected to come in at around 1.0% in 2023 and between 1.0% and 3.0% in 2024. Looking ahead, the construction industry is likely to face persistent challenges in the months ahead, as the projected global growth slows due to ongoing geopolitical tensions, persistently high inflation, and elevated interest rates.

Construction Cost Review 2Q2023

Tender prices for 2Q2023 have continued to be stable compared to 1Q2023. Despite the downward trend observed for some key material prices, labour costs remain high. Hence, tender prices for 2Q2023 have been maintained at a level similar to those of 1Q2023, attributed by the prevailing market uncertainty.

Construction Cost Review 1Q2023

Tender prices in 1Q2023 have shown an increase compared to 4Q2022. The upward trend is primarily driven by the increase in material prices and labour costs. Looking ahead, key construction material prices are expected to remain stable, while labour costs are anticipated to continue increasing. The projected price movement for the next twelve months is estimated to range from +3% to +6%, depending on prevailing market sentiment and any potential adverse ramifications of current economic instability.

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