- Singapore’s construction super-cycle is lifting activity across the value chain, but earnings outcomes vary by sub-sector in our opinion.
- Breaking the sector down into the various sectors of contractors, building materials, workers accommodation and specialised engineering, we note the following key trends:
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- Operational leverage Contractors and heavy engineering players, benefiting from multi-year order books and stronger project discipline.
- Key risks: Labour policy tightening, material cost volatility, steel price uncertainty and geopolitical disruptions.
- Overall, we remain positive that the construction sector backdrop remains robust, characterised by strong visibility, improving pricing discipline and structurally higher demand levels, although margin dispersion between sub-sectors is likely to persist.
Key local players in the construction value chain
Building materials:
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- Building material suppliers are direct beneficiaries of the construction supercycle, supported by rising volumes and selective pricing power. Although the sector remains exposed to raw material price volatility, disciplined hedging strategies have helped preserve margin resilience.
- In 2025, average market prices for Grade 40 pump-ready mixed concrete edged higher and are expected to remain firm on sustained domestic demand. In contrast, reinforcement bar prices softened amid weak global steel demand and persistent oversupply.
- Looking ahead, global steel demand is projected to recover modestly by 1.3% in 2026, supported by a gradual improvement in construction activity. However, geopolitical uncertainty and trade frictions are likely to cap price upside and temper the recovery momentum.
Contractors:
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