Construction Sector Posts Remarkable Performance

Mangalesri ChandrasekaranDecember 21, 2016


The performance of Malaysia’s construction sector proved to be remarkable this year, with 5,024 projects worth RM121 billion registered with the Construction Industry Development Board (CIDB).

Registering a growth of 8.2 percent in Q3 2016, the construction industry is forecasted to grow by 8.7 percent this year, up from last year’s 8.2 percent.

In fact, the value of projects jumped 36 percent to RM121 billion in the year to November from RM89 billion over the same period last year, said CIDB chief executive officer Datuk Ahmad Asri Abdul Hamid.

Infrastructure category accounted for 47 percent of the total projects, while residential, non-residential and social amenities followed.

The volume of projects awarded were mainly contributed by 14 mega projects, which are valued at over RM1 billion each.

“Out of 14 mega projects, 12 projects valued at RM33 billion were infrastructure projects mainly attributable to the Pan-Borneo Highway and the MRT2 project packages,” said Ahmad Asri. “This is in line with the government’s focus to improve public transportation under the 11th Malaysia Plan period beginning 2016 until 2020.”

Taking the backseat in 2016, the residential and non-residential projects were negatively affected by the global uncertainties.

External developments with a hard hitting impact include the results of the US presidential election, the Brexit, overhang of existing stocks of houses, tightening of loans by financial institutions, wait-and see approach taken by customers and the weakening of the ringgit.

Expected to grow by 8.3 percent next year, the construction industry’s outlook is encouraging as the predicted improvement in the domestic economy runs parallel to world economic recovery, said Ahmad Asri.

“The MRT2 (Sg Buloh-Serdang-Putrajaya) and Menara Warisan Merdeka projects are anticipated to contribute significantly in the upcoming years,” he said.

“As they are newly awarded projects and being awarded in packages, the impact of both projects are yet to be seen in 2016.”

The two projects are expected to boost the construction sector’s performance, via residential and commercial development within the surrounding areas.

“A new connecting-infrastructure will serve the transportation demand of the increasing population and reduce traffic congestion while a new commercial landmark will bring new business opportunities and stimulate economic growth.”

CIDB database showed that 22 packages worth RM24.1 billion of the MRT2 project and 10 packages worth RM3.8bil of Menara Warisan Merdeka project have been awarded, said Ahmad Asri.

“Under Budget 2017, the government will continue to fork out various means of financial assistance, subsidies and incentives to stimulate the housing sector, particularly the construction of affordable housing,” he added.


Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email


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