Sluggish construction sector gets much-needed boost from public infrastructure spending

Don’t pin your hopes on this unsustainable upside blip.

The lacklustre construction sector was saved by aggressive spending on public infrastructure in the fourth quarter.

The construction sector registered a surprising 8% quarter-on-quarter growth in Q4, following a sluggish 0.1% performance in the third quarter.

According to DBS, the upside blip can be traced to a jump in public infrastructure spending. However, the .
cooling property market, labour crunch and margin compression will continue to hinder growth and momentum in this sector.

Large public infrastructure projects include a number of new rail projects, as well as the 700-bed Ng Teng Fong General Hospital.

The construction sector is forecasted to register a 3% growth for the full-year 2014, down from the 6.1% growth that it posted in 2013.