What’s in store for Singapore’s construction sector and commodity prices

The Myst Condo will be a perfect commuter’s paradise with the Downtown Line MRT Station and its interchange just a short walk away, as well as the Bukit Panjang LRT station. Moreover, the current site of The Myst Condo is surrounded by renowned schools, shopping malls, entertainment spots and eateries. With its prime location and transport links, it is not hard to see why CDL Aries has selected this location to launch its new development.​

Directed by Michael Murphy, the director of South East Asia at Linesight, the economic forecast for Singapore in 2023 looks promising despite challenging market conditions. According to an analysis conducted by Linesight, the country’s Gross Domestic Product (GDP) is expected to grow at a rate of 1.5%, down slightly from the previous year’s 3.6% growth rate due to a worldwide slow down in manufacturing. To help mitigate this trend, the Monetary Authority of Singapore (MAS) has held back on tightening and maintained the current exchange rate policy band.

The Consumer Price Index (CPI-All) is also set to remain high in 2023, with MAS predicting annual inflation to be in the range of 5.5%-6.5%. Last year Singapore’s construction industry saw a 6.6% real-term expansion, boosted by a rise in consumer and investor confidence, coupled with eased Covid-19 related restrictions on businesses and travel. The industry is expected to remain steady with a 5.4% annual growth rate projected for 2023.

Barring issues such as labour shortages and high prices, the construction sector’s medium to long term prospects look encouraging, due to the initiative towards launching public housing projects. Lumber prices are expected to remain stable and within range, engendered by incentives for sustainable construction, such as the use of engineered lumber, and an uptick of residential construction recovering from 2020’s slump.

Cement and aggregates saw a sharp rise in prices during the first half of 2022, a trend that is set to continue looking forward. Boosted by investments in both infrastructure and residential development, demand for cement and aggregates will remain high, pushing up prices. Bricks, on the other hand, have seen prices hold steady, although a surge in construction demand will likely push prices upwards in the upcoming quarters.

Steel prices dropped through the second half of 2020 and into early 2023, but are set to pick up again with numerous large civil engineering projects set to start. Raw material prices remain volatile, although at lower highs than in the first half of 2022. Copper prices have also seen an incline, driven by renewed demand in China post the zero-Covid policy, though prices plateaued in January-March 2023. Domestic copper prices show further potential for growth as a consequence of Singapore’s Green Plan 2030.