The Malaysian construction sector is gearing up for a robust period of growth, buoyed by significant government contract flows outlined in the 2024 Budget. Hong Leong Investment Bank (HLIB) Research has shown optimism, marking the sector as “overweight” in light of the upcoming public project contract awards, which are expected to boost the industry beyond its current levels.
Among the anticipated projects are Pan Borneo Sabah Phase 1B, various flood mitigation packages, Penang LRT, Sabah-Sarawak Link Road, and LRT3 reinstatement, all part of an RM90 billion development expenditure outlined for 2024. This represents a 7.9% increase year-on-year, indicating a strong commitment to infrastructure development.
Moreover, the industry could also benefit from pursuing initiatives like the Special Economic Zone and Special Financial Zone in Johor, which are expected to generate further construction opportunities. HLIB also anticipates a rise in capital expenditure in the water sector due to tariff hikes planned for the following year.
On another front, the Madani Economic Framework, coupled with the 2024 Budget, positions the construction industry at the centre of transformative economic measures. Key budget allocations include RM27 billion for infrastructure projects, RM24.7 billion for People’s Housing Projects, and additional billions to improve government quarters and maintain federal roads and bridges.
While the Master Builders Association Malaysia (MBAM) acknowledges the boost provided by the 2024 budget, it advocates for additional measures to revitalise the sector. In light of the positive strides and substantial allocations, the construction industry remains hungry for more support to ensure sustainable growth and to address housing needs while coping with rising costs and ensuring fair contract terms.
