{"id":63851,"date":"2026-06-26T09:49:10","date_gmt":"2026-06-26T01:49:10","guid":{"rendered":"https:\/\/sgbuzz.com\/?p=63851"},"modified":"2026-06-26T09:49:10","modified_gmt":"2026-06-26T01:49:10","slug":"singapore-construction-demand-hit-a-10-year-high-where-to-look-for-investment-opportunities","status":"publish","type":"post","link":"https:\/\/sgbuzz.com\/?p=63851","title":{"rendered":"Singapore construction demand hit a 10-year high. Where to look for investment opportunities"},"content":{"rendered":"


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<\/p>\n

What happened?<\/h2>\n

Singapore’s construction sector is having its best year in over a decade.<\/p>\n

Total construction demand reached an estimated S$50.5 billion in 2025, marking the strongest year for the sector in a decade. Looking ahead, BCA expects demand to remain elevated at S$47 billion to S$53 billion in 2026.<\/p>\n

In our recent article on 4 growth themes to watch in Singapore stocks beyond dividends<\/a>, we identified Government Spending as one of\u00a0the structural themes shaping the Singapore market over the next few years.<\/p>\n

As we wrote then, infrastructure spending is typically stable and countercyclical, with multi-year investments that provide consistent demand for construction, engineering and related sectors.<\/p>\n

That theme is now showing up more clearly in Singapore construction, where public sector projects account for about 55% of total demand, supported by major projects such as Changi Airport Terminal 5, the Cross Island Line, Tuas Port and new HDB flats.<\/p>\n

In this article, I’ll look at what is driving Singapore’s construction upcycle, how long it is likely to last, and what kind of exposure makes sense for investors watching this multi-year infrastructure build-out.\u00a0<\/p>\n

\n\n\n\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n\n\n
Construction Sector \u2014 Key Economic Metrics<\/strong><\/td>\n<\/tr>\n
Metric<\/strong><\/td>\n2023<\/strong><\/td>\n2024<\/strong><\/td>\n2025<\/strong><\/td>\n2026F<\/strong><\/td>\n<\/tr>\n
Total Demand (S$B)<\/td>\n~S$33B<\/td>\nS$44.2B<\/td>\nS$50.5B<\/td>\nS$47\u201353B<\/td>\n<\/tr>\n
GDP Share (%)<\/td>\n~3.2%<\/td>\n~3.5%<\/td>\n~4.0%<\/td>\n~4.2%<\/td>\n<\/tr>\n
Sector Growth<\/td>\n4.10%<\/td>\n5.80%<\/td>\n6.50%<\/td>\n+4\u20135%<\/td>\n<\/tr>\n
Public Sector Share<\/td>\n~50%<\/td>\n55%<\/td>\n55%<\/td>\n~55%<\/td>\n<\/tr>\n
DfMA Adoption<\/td>\n~55%<\/td>\n~62%<\/td>\n~68%<\/td>\n>70%<\/td>\n<\/tr>\n
Source: BCA, MTI<\/i><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n

Why Singapore\u2019s construction upcycle may have further to run\u00a0<\/h2>\n

Construction demand is beating expectations and growing faster than the economy.<\/p>\n

The construction sector is often seen as cyclical.<\/p>\n

However, the current upcycle looks different because it is being supported by several large public and private projects at the same time.<\/p>\n

It is not just a recovery from the pandemic. It is also a reflection of Singapore\u2019s longer-term infrastructure needs across transport, housing, aviation, coastal protection and industrial development.<\/p>\n

#1 – Singapore construction demand keeps beating forecasts<\/h3>\n

BCA\u2019s construction demand forecasts have been exceeded in recent years.<\/p>\n

In 2024, BCA had forecast total construction demand of S$32 billion to S$38 billion. Actual demand came in higher at S$44.2 billion.<\/p>\n

In 2025, demand rose further to S$50.5 billion. That made 2025 the strongest year for Singapore construction demand in a decade.<\/p>\n

The repeated upside surprise suggests that the construction upcycle has been stronger than many expected.<\/p>\n

It also reflects a wider pipeline of projects being rolled out at the same time.<\/p>\n

These include Changi Airport Terminal 5, the Cross Island Line, Tuas Mega Port, new HDB flats, healthcare facilities, educational institutions and coastal protection works.<\/p>\n

Many of these projects are multi-year programmes. That means construction demand may not peak and fade immediately.<\/p>\n

Instead, demand could remain supported as contracts are awarded and projects move through different phases of construction.<\/p>\n

Total Construction Demand, Singapore (S$ Billion)<\/strong><\/p>\n

\"Singapore
Source: BCA<\/i><\/span><\/figcaption><\/figure>\n

#2 – Singapore construction is growing faster than the pace of the economy\u00a0<\/h3>\n

The strength in Singapore’s construction sector is showing up in the country’s economic growth numbers. Construction grew at around 5.3% in 2025, outpacing Singapore’s overall GDP growth of 5% \u2014 a sign that the sector is expanding at the pace of the broader economy, if not faster.<\/p>\n

Construction still accounts for a relatively small share of output, at around 4% to 5% of GDP. But as major infrastructure projects move ahead, its contribution is becoming harder to ignore.<\/p>\n

Construction Sector Growth vs. Singapore GDP Growth (%).<\/strong><\/p>\n

\"Construction
Source: Factset<\/figcaption><\/figure>\n

While activity may vary from year to year, the combination of airport expansion, rail infrastructure, housing supply and coastal protection suggests construction demand could remain above historical averages for many years.<\/p>\n

#3 – Public sector projects now drive more than half of construction demand<\/h3>\n

The public sector remains the key driver of Singapore construction demand.<\/p>\n

Public sector projects accounted for about 55% of total construction demand in 2024. (BCA, 2024)<\/p>\n

This is important because government-backed projects tend to be more visible than private sector projects.<\/p>\n

For construction-related companies, public sector demand may provide a clearer pipeline of work, even when private sector activity slows.<\/p>\n

Major public sector projects such as Changi Airport Terminal 5, the Cross Island Line, Tuas Mega Port, new HDB flats and coastal protection works are not short-term projects.<\/p>\n

They are large, multi-year programmes.<\/p>\n

This gives contractors and related companies more visibility on potential future work.<\/p>\n

Private sector demand also remains relevant.<\/p>\n

It is being supported by high-specification industrial buildings, data centres, healthcare facilities and educational institutions.<\/p>\n

Together, public and private sector demand have created a broader construction pipeline across Singapore\u2019s economy.<\/p>\n

BCA 2026 Construction demand by segment\u00a0<\/strong><\/p>\n

\"BCA
2025 Demand Mix: Public vs Private Sector. Source: BCA<\/figcaption><\/figure>\n

BCA\u2019s outlook for 2027 – 2030<\/strong><\/p>\n

\"BCA\u2019s
Source: BCA, Beansprout<\/figcaption><\/figure>\n

#4 – The margin story most investors may be missing in Singapore construction\u00a0<\/h3>\n

Another reason the construction upcycle may be different this time is the growing use of Design for Manufacturing and Assembly (DfMA).<\/p>\n

DfMA refers to construction methods where parts of a building are manufactured off-site before being assembled on-site.<\/p>\n

One example is Prefabricated Prefinished Volumetric Construction (PPVC).<\/p>\n

Under PPVC, entire room modules can be built in a factory before being transported and installed at the project site.<\/p>\n

This can help reduce manpower needs, shorten construction time and improve consistency.<\/p>\n

According to the Ministry of National Development (MND), the adoption rate of DfMA across new developments increased from about 61% in 2023 to 68% in 2024, putting Singapore on track to achieve its target of 70% adoption by 2025.<\/p>\n

DfMA has become an important driver of productivity and margin improvement, particularly for contractors with their own manufacturing capabilities.<\/p>\n

\"DFMA
Source: BCA, Beansprout<\/figcaption><\/figure>\n

Why government spending may support Singapore construction demand<\/h2>\n

Government spending and major infrastructure projects provide the long runway.<\/p>\n

Budget spending alone does not automatically translate into profits for construction companies.<\/p>\n

However, it can provide the foundation for a more visible pipeline of work.<\/p>\n

That is especially important in a sector where order books, project execution and margins matter.<\/p>\n

#1 – Government spending is driving large-scale investment into the construction sector<\/h3>\n

Budget 2026<\/strong> committed S$154.7 billion<\/strong> in total government expenditure, which is the largest budget in Singapore’s history.<\/p>\n

Budget 2025 reached S$123.8 billion with S$26.8 billion for development projects alone. Year after year, this government is doubling down on long-term infrastructure.<\/p>\n

What makes this different from an ordinary budget boost is the nature of the spending. These are not one-off stimulus cheques, they are decade-long construction programmes with contracts being awarded year by year, locking in revenue for the companies that win them.<\/p>\n

Key Construction-Relevant Budget Allocations<\/strong><\/p>\n

\"Key
Key Construction-Relevant Budget Allocations. Singapore Budgets 2025 & 2026. Source: MOF, MOT, BCA<\/i><\/span><\/figcaption><\/figure>\n

Key Construction-Relevant Budget Allocations. Singapore Budgets 2025 & 2026. Source: MOF, MOT, BCA<\/p>\n

For example, Singapore has committed significant spending to the Land Transport Master Plan 2040.<\/p>\n

This includes ongoing investments in rail networks, public transport infrastructure and connectivity.<\/p>\n

Other major areas include Changi Airport Terminal 5, Tuas Port, coastal protection, healthcare infrastructure and new housing supply.<\/p>\n

These projects are important because they create demand across the construction value chain.<\/p>\n

Main contractors may benefit from civil engineering and building contracts.<\/p>\n

Specialist contractors may benefit from tunnelling, piling, mechanical and electrical works.<\/p>\n

Building materials companies may benefit from higher demand for concrete, steel and other construction inputs.<\/p>\n

The impact can also extend beyond construction.<\/p>\n

Infrastructure spending may support related sectors such as logistics, industrial property, utilities and engineering services.<\/p>\n

This is why government spending can act as a multiplier for the broader Singapore economy.<\/p>\n

#2 – The major infrastructure projects driving Singapore construction demand<\/h3>\n

Several major infrastructure projects are likely to shape Singapore construction demand over the next few years.<\/p>\n

The first is Changi Airport Terminal 5. The project is expected to support Singapore\u2019s long-term aviation capacity and will involve construction, tunnelling, engineering and supporting infrastructure works over several years.<\/p>\n

The second is the Cross Island Line. As one of Singapore\u2019s major rail projects, it should continue to create demand for civil engineering, tunnelling and mechanical and electrical works.<\/p>\n

The third is Tuas Mega Port. The port is being developed in phases and is expected to remain a long-duration infrastructure project.<\/p>\n

The fourth is public housing. Singapore has been ramping up HDB flat supply, with new BTO projects adding to construction demand.<\/p>\n

The fifth is coastal protection. Long-term plans such as Long Island could become an important part of Singapore\u2019s infrastructure pipeline as the country prepares for rising sea levels.<\/p>\n

These projects are not all at the same stage.\u00a0<\/p>\n

Some are already under construction. Others are still in earlier phases.<\/p>\n

This staggered timeline may help sustain construction demand beyond a single year.<\/p>\n

\n\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n\n
Timeline<\/strong><\/td>\nProject<\/strong><\/td>\nWhat it means for contractors<\/strong><\/td>\n<\/tr>\n
Now \u2192 2027<\/strong><\/td>\nHDB BTO Blitz \u2014 55,000 flats<\/td>\n~150 projects running simultaneously. Core bread-and-butter work for SGX main contractors.<\/td>\n<\/tr>\n
2025 \u2192 2032<\/strong><\/td>\nCross Island Line Phases 1 & 2<\/td>\nPhase 2 (15km, 6 stations) started July 2025, completes ~2032. Tunnelling, civil, M&E.<\/td>\n<\/tr>\n
2025 \u2192 2035<\/strong><\/td>\nChangi Airport Terminal 5<\/td>\n~S$10B total project. Tunnelling alone was a S$780M contract in 2025.<\/td>\n<\/tr>\n
Ongoing \u2192 2040s<\/strong><\/td>\nTuas Mega Port \u2014 Phases 3 & 4<\/td>\nWorld’s largest fully automated container port. Civil and piling work stretched over decades.<\/td>\n<\/tr>\n
2030 \u2192 2040s<\/strong><\/td>\n“Long Island” Coastal Reclamation<\/td>\nFunded through the S$5B Coastal Protection Fund. Has not broken ground yet.<\/td>\n<\/tr>\n
Source: Land Transport Authority (LTA), Changi Airport Group (CAG), Maritime and Port Authority of Singapore (MPA), Housing & Development Board (HDB), and Public Utilities Board (PUB).<\/i><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n

#3 – Singapore\u2019s infrastructure pipeline stretches beyond 2026<\/h3>\n

One reason this construction cycle stands out is the length of the pipeline.<\/p>\n

BCA expects total construction demand to remain elevated in 2026, with a forecast range of S$47 billion to S$53 billion.<\/p>\n

For the medium term, BCA projects construction demand of S$39 billion to S$46 billion per year from 2027 to 2030.<\/p>\n

Even the lower end of this forecast range would still be above the levels seen before the recent upcycle.<\/p>\n

Some of the biggest infrastructure projects are also still in the early stages.<\/p>\n

Changi Airport Terminal 5 is expected to be developed over many years.<\/p>\n

The Cross Island Line is being built in phases.<\/p>\n

Tuas Mega Port will continue to be developed over the longer term.<\/p>\n

The proposed Long Island coastal protection and reclamation project has not fully moved into construction yet.<\/p>\n

This suggests that the construction pipeline may remain supportive for several years, rather than peaking in a single year.<\/p>\n

\"Construction
Source: BCA, January 2026<\/figcaption><\/figure>\n

For investors, the key point is that earnings visibility may improve when companies have a strong order book and exposure to long-duration public sector projects.<\/p>\n

However, a strong order book does not automatically mean higher profits.<\/p>\n

Execution, costs and margins still matter.<\/p>\n

Where investors can look in the Singapore construction upcycle<\/h2>\n

Many construction stocks have already doubled in the past year. But the biggest projects are still in early stages and contracts worth billions are still being awarded.\u00a0<\/p>\n

For investors, there are two broad ways to look at the Singapore construction theme.<\/p>\n

The first is through main contractors.<\/strong><\/p>\n

These are companies that win and deliver major construction and infrastructure projects. They may benefit directly when public sector contracts are awarded.\u00a0<\/p>\n

For this group, I would pay attention to order book size, project mix, government exposure, execution track record and balance sheet strength.<\/p>\n

A large order book can provide revenue visibility.<\/p>\n

However, investors should also check whether the projects are profitable, whether margins are improving, and whether the company has enough cash flow to support working capital needs.<\/p>\n

Companies that have complementary businesses that provide recurring income, may help to support earnings across different stages of the construction cycle.<\/p>\n

The second way is through building materials companies.<\/strong><\/p>\n

These companies may benefit from higher construction activity across the industry.<\/p>\n

Unlike main contractors, they may not need to win each project directly.<\/p>\n

Instead, they can benefit when demand for materials rises across public and private construction.<\/p>\n

For this group, I would look at market position, pricing power, operating scale and exposure to long-term construction demand.<\/p>\n

Companies with integrated operations may be better placed to manage costs and supply chain risks.<\/p>\n

\"What
Source: Beansprout<\/i><\/span><\/figcaption><\/figure>\n

What to watch before investing in Singapore construction stocks\u00a0<\/h2>\n

Singapore construction stocks have already attracted more investor attention.<\/p>\n

The market appears to be pricing in stronger earnings visibility, larger order books and the longer runway from infrastructure spending.<\/p>\n

This is understandable, given the scale of Singapore\u2019s infrastructure pipeline.<\/p>\n

However, investors should be careful not to assume that the rally will continue in a straight line.<\/p>\n

After a strong re-rating, the next phase may depend more on earnings delivery than valuation expansion.<\/p>\n

This means quarterly results, new contract wins, margin trends and cash flow will become more important.<\/p>\n

A construction company can have a large pipeline but still disappoint if costs rise faster than expected or projects face delays.<\/p>\n

#1 – Labour shortages and construction cost inflation<\/h3>\n

The first risk is labour.<\/p>\n

Singapore construction still depends on foreign manpower, specialist workers and project managers.<\/p>\n

If labour remains tight, contractors may face higher costs and slower project execution.<\/p>\n

The second risk is cost inflation.<\/p>\n

Materials such as steel and concrete can be volatile.<\/p>\n

If a company takes on fixed-price contracts and costs rise after the contract is awarded, margins may come under pressure.<\/p>\n

This is one reason why productivity improvements such as DfMA matter.<\/p>\n

Companies that can reduce labour intensity or improve construction efficiency may be better positioned to manage cost pressures.<\/p>\n

#2 – Project execution risks in major infrastructure projects<\/h3>\n

The next risk is project execution.<\/p>\n

Large infrastructure projects can be technically complex.<\/p>\n

For example, major tunnelling, transport and reclamation projects often involve engineering challenges.<\/p>\n

Delays, design changes and cost overruns can affect profitability.<\/p>\n

This is especially important for contractors involved in large fixed-price contracts.<\/p>\n

A company may have a strong order book, but profitability still depends on whether the work is delivered on time and within budget.<\/p>\n

Investors should therefore look at execution track record, not just contract wins.<\/p>\n

#3 – Valuation risks after the rally in construction stocks<\/h3>\n

The final risk is valuation.<\/p>\n

Some construction-related companies have already moved up sharply.<\/p>\n

Investors buying after a strong rally may need to be more disciplined about valuation and earnings expectations.<\/p>\n

If earnings growth does not keep up with share price gains, valuations could become stretched.<\/p>\n

The sector may also face competition.<\/p>\n

Major infrastructure projects can attract global contractors.<\/p>\n

Smaller listed companies may participate as subcontractors, which could mean different risk and margin profiles.<\/p>\n

For investors, the key is to avoid treating all construction-related companies the same way.<\/p>\n

Companies with strong balance sheets, better execution and exposure to long-duration public sector projects may be better placed than companies that are simply riding the sector theme.<\/p>\n

\n\n\n\n\n<\/colgroup>\n\n\n\n\n\n\n\n
Risk Level<\/strong><\/td>\nRisk<\/strong><\/td>\nDetail<\/strong><\/td>\n<\/tr>\n
HIGH<\/td>\nLabour Shortage<\/td>\nSingapore tightened foreign worker quotas by 4.2% in January 2024, directly at odds with record construction demand. Specialist roles are acutely short.<\/td>\n<\/tr>\n
MEDIUM<\/td>\nConstruction Cost Inflation<\/td>\nSteel, concrete, and labour costs remain elevated. Fixed-price contracts can squeeze margins if material prices spike.<\/td>\n<\/tr>\n
MEDIUM<\/td>\nProject Execution Risk<\/td>\nComplex jobs like Changi T5 tunnelling carry real technical risk. Cost overruns and delays are common in mega-infrastructure globally.<\/td>\n<\/tr>\n
MEDIUM<\/td>\nValuation After the Re-rating<\/td>\nTop stocks returned 40\u2013148% in 12 months. Investors entering now need to rely on earnings delivery rather than multiple expansion.<\/td>\n<\/tr>\n
LOW\u2013MED<\/td>\nInternational Competition<\/td>\nMega-projects attract Tier 1 global contractors. SGX small-caps may end up as subcontractors with different margin profiles.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n

What would Beansprout do?<\/h2>\n

Total construction demand reached S$50.5 billion in 2025, a 10-year high.<\/p>\n

However, major projects such as Changi Airport Terminal 5, the Cross Island Line and Long Island are still in the early or pre-construction phases, which means much of the contract spending may still be ahead.<\/p>\n

Budget 2026\u2019s S$154.7 billion commitment also suggests that the demand pipeline is backed by government spending, not just market sentiment.<\/p>\n

Overall, I would treat the construction sector as an expansion of the government spending theme we highlighted in our growth themes to watch in Singapore stocks.<\/a>\u00a0<\/p>\n

It also supports our view on why Singapore stocks are still worth looking at in 2026.\u00a0<\/a><\/p>\n

However, I would avoid assuming that all construction-related companies will benefit equally. My approach would be to focus on companies with meaningful exposure to government-backed projects.<\/p>\n

This could include top-tier contractors eligible for larger public infrastructure projects, as well as building materials companies that benefit from higher industry-wide construction volumes.<\/p>\n

The two profiles complement each other, as contractors may benefit more directly from contract wins while building materials companies may offer broader exposure to construction activity.<\/p>\n

Also, since many Singapore construction stocks have already re-rated, the next phase may depend more on earnings delivery, margins and cash flow.<\/p>\n

To identify these stocks to put into my opportunity pot <\/a>as part of Beansprout’s four pots of wealth,<\/a> I would screen them using the four simple checks.\u00a0<\/a><\/p>\n

If you are looking for more Singapore stock ideas linked to long-term growth themes, explore our high-conviction curated stock opportunities here.<\/a><\/p>\n

If you prefer broad exposure to blue chips without picking individual names, you can learn more about the Straits Times Index (STI)<\/a>.<\/p>\n

Which part of the Singapore market are you watching most closely now? Share with us in the comments below or in our Telegram group<\/a>!<\/p>\n

Planning to invest in Singapore stocks? Compare the best Singapore brokers to find the right trading platform<\/a>, and see the latest promotions and sign-up rewards available<\/a>.<\/p>\n

Follow Beansprout on Youtube<\/a>, Facebook<\/a> and Instagram<\/a>, and add Beansprout as your preferred source on Google<\/a> so you never miss an update.<\/p>\n

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