According to the Singapore Construction Market Review and Outlook 2026, released by SJ Group’s Project and Cost Management business unit, Singapore’s construction sector is expected to stay strong in 2026, even as geopolitical tensions and supply chain disruptions raise cost pressures.
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.
“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 SGD47 billion to SGD53 billion this year, after reaching SGD50.5 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 per cent in 2026, with material prices already up by 5 to 15 per cent amid disruptions linked to tensions in the Middle East. Oil prices exceeding USD100 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 SGD11.6 billion and SGD13.4 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 SGD6.1 billion and SGD6.7 billion after a weak 2025, led by projects such as the Marina Bay Sands expansion.
The report noted that labour constraints and rising business costs remain structural challenges, with productivity improvements increasingly critical. To navigate these challenges, the industry needs broader adoption of digital technologies, greater design standardisation, and wider use of modular construction methods to support resilience and growth. While global uncertainties may weigh on the outlook, the sector is expected to remain supported by sustained government investment and a steady pipeline of projects.
Read the full Singapore Construction Market Review and Outlook 2026 here.
