Construction Sector to Perform Better This Year

Mangalesri Chandrasekaran27 Jun 2016


The value of construction jobs given out for the year 2016 has improved as compared to the same time last year, and is expected to reach a value of RM150 billion as compared to RM124 billion in 2015.

According to Penang Master Builders and Building Materials Dealers’ Association (PMBBMDA) immediate past president Datuk Lim Kai Seng, over 7,000 jobs are expected to be created in 2016 within the property sector which exceeds the number of job openings created in 2015.

In the year 2015, a total of 6,885 jobs were created – 1,745 from the government sector and the remaining 5,140 from the private sector.

One of the factors contributing to the increase of value and jobs is none other than the mega projects in Malaysia such as the light rail transit (LRT), mass rapid transit (MRT), West Coast Expressway, Central Spine Road, and Pan Borneo Highway in Sabah.

Previously, the Works Minister Datuk Seri Fadillah Yusof predicted a growth in the overall construction industry between 8% and 10%.

But things seem to be the direct opposite for Penang as the construction value for this year is about RM6 billion, compared to RM7.5 billion in 2015. However, the volume of jobs is predicted to be over 600, when only 501 jobs were created in 2015.

This was due to the fact that the state is focusing more on affordable housing projects which have a low gross development value (GDV). This caused the decline in value, as the value of construction for a certain project is calculated from its GDV.

“The construction value of a project is 40% of its GDV. Hence, even though the volume of the projects increased, the value of constructions remains low,” said Penang Chief Minister Lin Guan Eng.

Despite the decline in the value of construction, the future seems to be bright for Penang as there are four developers in Penang undertaking RM7.58 billion GDV projects over the next three to four years.

These developments by Ideal Property (RM4.38 billion GDV), Ivory Properties Group Bhd (RM1.8 billion GDV), Eastern & Oriental Bhd (RM1 billion GDV) and IJM Land Bhd (RM400 million GDV) will generate about RM3 billion worth of contracts. This figure is not inclusive of the GDV of projects by Eco World Development Group Bhd, Mah Sing Group Bhd and other developers.


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


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