US tariff-led aluminium price volatility hits Singapore construction industry, with its GDP contribution shrinking 5%

The Republic of Singapore, a vibrant island nation and city-state in Southeast Asia, boasts a robust construction industry, driven by government initiatives, technological advancements, and a focus on sustainability. The sector spans commercial, institutional, industrial, and infrastructure projects, positioning Singapore as a regional leader in construction. Moreover, recent investments in renewable energy infrastructure to achieve a solar energy capacity of 2GW by 2030 further bolster the industry's growth in the construction sector. According to market research firms like IMARC Group and Next Move Strategy Consulting, Singapore’s construction market is projected to expand at a compound annual growth rate (CAGR) of 4.2 per cent from 2025 to 2033. Valued at approximately USD 31.18 billion in 2023, the market is expected to reach around USD 43.22 billion within the next 5 to 7 years.

According to Teo Jing Siong, Group Director of the Strategic Planning and Transformation Office at the Building and Construction Authority, Singapore’s construction industry recorded a 5 per cent increase in GDP contribution up to 2024, more than 20 times higher than its level in 1965. In 2024, the construction industry bagged contracts worth around USD 44.2 billion, up from USD 34.2 billion in 2023.

But currently, various reports suggest that the Singapore construction sector is facing headwinds as a result of the US tariffs on aluminium and steel, putting firms under uncertainty with volatile pricing and supply chain of raw materials. In the first quarter of 2025, the industry's GDP contribution declined to SGD 5,022 million (USD 3,902 million), down from SGD 5,093.20 million (USD 3,958 million) in the fourth quarter of 2024.