- Singapore sees innovation as crucial to transforming the country’s construction sector with foreign firms playing a significant part in these efforts
- An ongoing labour shortage, as well as sustainability targets, has increased the need for new technologies
- The country’s construction industry is projected to grow by 6.5 percent in 2025
The major players in Singapore’s construction sector have made it known they are looking for innovations to overcome existing challenges, including a pressing labour shortage. Robotics, digitalisation tools, and sustainability advancements are just a few of the solutions being sought. Asian Insiders Singapore Partner Alessandro Corbi explores potential opportunities for overseas companies in the Lion City.
Singapore’s construction sector is forecasted for solid growth of 6.5 percent in 2025, driven both by large projects, such as Changi Airport Terminal 5, major hotel expansions as well as 150 concurrently built Built-To-Order (BTO) projects by the Housing Development Board (HDB).
The sector, however, faces challenges from an ongoing labour shortage and needs to continue implementing the growing requirements for sustainable building methods and materials. The Singapore Building and Construction Authority (BCA) aims to ramp up decarbonisation efforts across the industry, including the building of low emissions buildings and districts powered by efficient building management.
To address these topics and build a world-class and resilient sector, BCA published a refreshed Built Environment Industry Transformation Map (ITM) in 20222 which looks to transform the value chain, increase technology usage in building activities, and ensure the sector is more resilient in the future.
Key issues may slow building
Singapore has long relied on foreign labour to power its construction industry but changes in immigration policies, as well as increasing competition from major projects in the Middle East, are shifting market dynamics. The pressure is most acutely felt when it comes to skilled labour. In particular, specialised roles have become harder to fill.
Additionally, the government has reduced the number of foreign employees for each local employee a company can hire. With construction in the country reliant on overseas workers, leveraging technology is one way to offset limitations.
The industry is also keeping a close eye on material prices as these could drive up costs and potentially curb growth in the sector. While this hasn’t slowed construction, the situation should be monitored.
Singapore construction opportunities for foreign investors
There is an understanding in Singapore that innovation is required to address these challenges. The country is keen to attract companies that have developed cutting-edge technologies. At present, in-demand solutions can be broken down into three categories.
1) Robotics
As mentioned above, a labour shortage is a potential roadblock for the building industry. Construction robots are seen as a potential solution. Technologies capable of automated wall panel installation, wall painting, or otherwise speeding up labour-intensive tasks are sought after.
Some innovation in this area has been trialled by the HBD with the early results have been positive. There is now a desire to scale up the use of robotics further.
2) Digitalisation
As the country explores ways to improve efficiency, digitalisation tools are increasingly being used. Now, the BCA would like to expand these efforts further by leveraging BIM modelling and design, smart inspections, and remote supervision, among other technologies.
3) Sustainability
Any innovation that will assist Singapore in achieving its 80-80-80 in 2030 plan to green 80 percent of all buildings, have 80 percent of new developments certified Super Low-Energy, and reach 80 percent improvement in energy efficiency is being considered. Low carbon materials and self-repairing concrete are just a few of the potential opportunities available.
Why Singapore?
Singapore remains one of the best countries to do business in for overseas companies. It maintains favourable business policies in addition to detailed Intellectual Property protection. The country also boasts a large number of Free Trade Agreements and a transparent tax setup that makes it possible for companies to avoid double taxation from cross-border activities, including trade and investments.
The country further offers attractive conditions and incentives for companies who choose Singapore as a regional headquarters, research and development hub, or both potentially. Despite the competitive labour market, Singapore’s workforce is highly educated and productive with several world-class universities and research centres preparing the sector’s next generation.
This makes Singapore a strong initial entry point for companies with a long-term vision of entering Southeast Asia as a whole. Market dynamics in these countries are expected to follow suit over time. Interestingly, several neighbouring markets are starting to implement construction sustainability requirements, a trend likely to grow moving forward.
Final thoughts
Singapore is serious about transforming the construction sector and realises the benefits of attracting the best technologies from across the world. For overseas firms boasting the technologies and tools required by the Lion City, it is really about taking advantage of the opportunity.
Of course, it is not as easy as showing up with a ‘for sale’ sign. Singapore is a competitive market with many well-established players. This is where a market entry partner can make the difference and Asian Insiders can help you identify and reach the proper counterparties and stakeholders, forging strong partnerships.
Moreover, our network of regional experts ensures you have a roadmap to future growth across Asia should you wish to pursue a widespread strategy. Singapore is oftentimes the ideal entry point for businesses. And with so much activity happening in construction on the regional level, making the move sooner rather than later will make a world of difference.
Singapore remains one of the world’s most appealing markets for foreign investment, and the construction sector is no different. To assess your readiness to enter the market, schedule a no-obligation call with Jari Hietala, Managing Partner: jari.Hietala (at)asianinsiders.com or Asian Insiders Partner Allesandro Corbi alessandro.corbi(at)asianinsiders.com