How the city-state manages spending

After the pandemic, construction in Singapore has picked up.

Several mega projects worth US$ 8 billion are underway Las Vegas Sands development and a The new terminal at Changi Airport both of them 2025. Another major project in the public sector is the Tengah General & Community Hospital, which will add 4,000 patient beds by 2030.

Singapore’s Building and Construction Authority (BCA) made the prediction in January Construction demand will reach S$53 billion (about $42 billion) in the island nation this year – 15% higher than previous estimates.

“The construction industry boomed after the Covid-19 pandemic and we haven’t looked back since,” Alex Saez, partner and managing director APAC at engineering consultancy Cundall, told CNBC.

For construction contractors, getting the job done means finding the right people, working with developers and leveraging new technology, what one consultant describes as a “digital renaissance” for some firms.

While the construction boom is good for the economy, it also creates challenges, with construction costs in Singapore consistently among the highest in the world.

In an email to CNBC, construction consultant Turner & Townsend estimated that costs will rise up to 5% this year due to supply chain disruptions for products such as cement and ready-mixed concrete, as well as longer work hours for plumbing and electrical systems and rising prices for the semiconductors needed for those systems.

As well as a general labor shortage, the market for so-called PMET roles – professionals, managers, executives and technicians – in Singapore is “remarkably tight”, according to Kho Sze Boon, Singapore managing director of Turner & Townsend.

“Capability gaps continue to impact schedule and quality, particularly for specialist subcontractors on large projects,” Hoo told CNBC in an email. To help address this, BCA will launch an additional training program for project managers later this year, he said.

Also, CGS International Securities Singapore analysts Natalie Ong and Son Wang Lin said there is a trend towards “double hat” where workers are trained to take on additional responsibilities.

They predicted another strong year of contract awards in 2026, followed by “four years of high construction awards.”

In an email to CNBC, Ong and Sodan said, “Some companies are adapting to the problem of labor shortages by training their workers (i.e., double-hatching) to allow a smaller workforce to perform multiple functions.” For example, they say, engineers are being trained to use technology that reduces repetitive tasks, meaning they can focus on “doing.”

For a Singapore contractor Soil structureCEO Han Ren Lim told CNBC there was a shift from labor-intensive activities to “high-cost, high-tech manufacturing buildings.”

In addition to using pre-assembled components for buildings, Soilbuild expects to use more technologies such as enterprise risk management systems to “further increase cost efficiency,” Lim said.

According to experts at CGS, construction firms are turning to technology to help close skills gaps.

Building maintenance company ISOTeam is already using drones and AI to inspect building facades for defects and is developing drones capable of washing and painting exterior walls, reducing the need for construction work and reducing the risk of working at height.

Also, while investment in such technology costs money, it should eventually “turn into a good return,” Ong and Sodan told CNBC.

Since April, Singapore’s BCA provides new grants for small companies to invest in technologyincluding robots and automation, he says, can achieve “labor savings of up to 50%.” The BCA also wants to improve firms’ digital capabilities, such as contract management and regulatory approvals.

Firms in Singapore are using computer vision technology from startup OpenSpace to track construction projects and software from PlanRadar to track planning and defects, the two companies told CNBC in an email, citing business growth in the region.

Turner & Townsend’s Khoo says it won’t be enough for companies to adopt new digital tools. Many firms “need to rethink how technology supports their business goals,” he told CNBC. “Some may experience a kind of digital renaissance that will reshape their operating models,” he said.

Legend Robot makes machines that spray putty and latex paint on the interior walls of residential buildings, as well as robots that can smooth floors and lay tiles. According to Jason Liang, director of marketing at Legend Robot, the average person can paint an area of ​​about 200 square meters per day, and one of the company’s robots can cover up to 1,500 square meters per day, which is seven times more productive.

The company has operations in Singapore, China, the Middle East and Europe, and its machines cost about $70,000 for a 3.3-meter-tall latex paint-spraying robot, or about $120,000 for a model that can tackle larger areas, Liang told CNBC. “We are seeing growing demand in many countries,” he said.

Although billions of dollars have been poured into new projects, construction activity has not yet peaked. Analysts at CGS International raised their estimates for the construction industry in January, describing an “extended cycle” and predicting that contractor revenue would peak in the 2028-29 financial year, compared to the peak in 2027-28.

CGS expects EPS to grow 16% to 41% between 2026 and 2028, according to a research note dated January 23rd.

In addition, the city-state master plan in the next 10-15 years, new parks, residential areas and metro lines will become part of the landscape. But because land is scarce in Singapore, “decisions about what to build and what to keep are getting more and more complicated,” Saez told CNBC.

Higher construction costs mean higher living costs. Jonathan Denis-Jacob, director of Singapore-based real estate consultancy Cistri, said new private residences are becoming increasingly expensive. Singapore tops the list of the most expensive cities for individuals with high net income in the previous year.

But construction projects, especially new infrastructure, are being delivered on time and on budget, Denis-Jacob said. That’s partly because the projects are “driven by real needs rather than political agendas” as the government focuses on the long term, he said.

For Winn Cam, director of the architecture firm Morrow, the city-state does more than just use construction as a means to address housing and infrastructure shortages. “Singapore has moved to ‘sculpting and greening’ the city through ‘building’ alone,” he told CNBC.

Charu Kokate, senior partner at Safdie Architects, said the government had been careful to ensure that new buildings suited the neighborhoods and that green initiatives such as rainwater harvesting were an integral part of the projects.

“All efforts are made to make life more comfortable for people. I think it’s just something here that you don’t see anywhere else.” said Kocate.