Malaysia Construction Market - Growth, Trends, COVID-19 Impact and Forecasts (2022-2027)

Malaysia Construction Market is Segmented By Sector (Commercial, Residential, Industrial, Infrastructure (Transportation Constructions), Energy & Utility Constructions) and By Construction Type (Additions, Demolition & New Construction, and New Constructions). The report offers market size and forecasts for Malaysia Construction Market in value (USD Billion) for all the above segments.

Market Snapshot

Malaysia Construction Market Size
Study Period: 2018-2027
Base Year: 2021
CAGR: >6 %

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Market Overview

Malaysia Construction Market is expected to grow at a CAGR of approximately 6% during the forecast period 2022-2027.

Much like everything else, the construction industry in Malaysia was severely affected by the COVID-19 pandemic. Most construction work, except that classified as critical or essential services, was halted throughout the Movement Control Order (MCO). Even after the MCO was lifted, contractors have continued to encounter disruption, such as having to incorporate stringent standard operating procedures on health and safety measures ("SOPs") for construction sites. Such disruption has prevented them from carrying out their works as originally and normally envisaged.

The construction industry is expected to register growth driven by investment in large-scale transport and energy projects. In September 2021, the government announced its plan to establish the Public Private Partnership (PPP) 3.0 model, a specialized mechanism to fund infrastructure projects in the 12th Malaysia (12MP) plan between 2021 and 2025. In December 2021, the Malaysian parliament passed the government's budget for 2022, approving an expenditure of MYR 332.1 billion (USD 81.8 billion). The budget includes an allocation of MYR 75.6 billion (USD 18.6 billion) for development expenditure, as well as several incentives to improve employment rates and support businesses.

Scope of the Report

In its most widely used context, construction covers the processes involved in delivering buildings, infrastructure, industrial facilities, and associated activities through to the end of their life. It typically starts with planning, financing, and design and continues until the asset is built and ready for use; construction also covers repairs and maintenance work and works to expand, extend and improve the asset, and its eventual demolition, dismantling, or decommissioning.

Malaysia's Construction Market is Segmented By Sector (Commercial, Residential, Industrial, Infrastructure (Transportation Constructions), Energy & Utility Constructions) and By Construction Type (Additions, Demolition & New Construction, and New Constructions). The report offers market size and forecasts for Malaysia Construction Market in value (USD Billion) for all the above segments.

By Sector
Commercial Construction
Residential Construction
Industrial Construction
Infrastructure (Transportation) Construction
Energy and Utilities Construction
By Construction Type
Additions
Demolition and New Construction
New Constructions

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Key Market Trends

Investments in Infrastructure Sector to Boost Construction Activity

The Malaysian government has made considerable progress in expanding and modernizing its infrastructures throughout the country. This effort is evident in the five-year centralized economic development plan known as the Malaysia Plan, whereby public sector infrastructure development consistently holds the largest funding portion. Among the revived mega infrastructure projects is the 640 km-long East Coast Rail Link project, which resumed work on July 25, 2020, after a year-long suspension. The bulk of domestic demand for Malaysian steelmakers will likely come from the construction of the 20 stations planned for the rail project, as there is no rail maker in Malaysia.

In addition to ECRL, other projects such as the Light Rail Transit 3, Mass Rail Transit 2, Electrified Double Track Gemas-Johor Bahru, Klang Valley Double Track Phase 2, Central Spine Road, Pan Borneo Highway, and Coastal Highway in Sarawak are expected to boost Malaysia's construction segment. As of October 2021, the ECRL project is on track for completion by the end of 2027. The construction industry expanded in 2021 as major infrastructure, and affordable housing projects were revived and accelerated to meet deadlines. Most of the growth is expected to be fuelled by domestic investments. State investments and developments in Penang, Johor, and Negeri Sembilan will also help boost the construction industry in 2022.

Malaysia Construction Market Trends

Increase in Residential Constructions To Drive the Construction Market

In 2021, construction work in Malaysia was valued at approximately 111.98 billion Malaysian ringgit, indicating a decrease from prior years due to the pandemic. In 2021, residential building construction by the public sector in Malaysia was valued at approximately 1.02 billion Malaysian ringgit. However, Malaysia's public residential building construction market has been observing strong growth until 2019, when it was valued at 1.9 billion Malaysian ringgit, rising from 1.46 billion Malaysian ringgit. In 2021, the value of residential building construction by the private sector in Malaysia was valued at approximately 25.22 billion Malaysian ringgit, down from 27.26 billion Malaysian ringgit in 2020.

The previous government had announced a total of 300,000 housing units through its various housing programs, such as the 1Malaysia Civil Servants Housing project (PPA1M), which aimed to build 175,000 affordable housing units across the country, First House Deposit Financing, Program Rumah Mesra Rakyat, People's Housing Program (PPR), and Syarikat Perumahan Negara Berhad. These projects boost residential construction markets during the forecast period.

Malaysia Construction Market Growth

Competitive Landscape

The Malaysian construction market is less competitive due to major international players holding a large share of the total market. Furthermore, the residential and transport construction sectors have a huge potential for growth in the forecasted period which stimulates opportunities for other market players. Some of the major players in Malaysia Construction Market are YTL Corporation Berhad, IJM Corporation Berhad, Gamuda Berhad, UEM Group Berhad and Malaysian Resources Corporation Berhad.

Recent Developments

January 2022: Nestcon Bhd has accepted two sub-contract awards from China Communications Construction (ECRL) Sdn Bhd involving the East Coast Rail Link project in Kota Bharu, Kelantan, worth MYR 90.4 million (USD 21.4 million) via wholly owned subsidiary Nestcon Infra Sdn Bhd. The infrastructure works for the construction and completion of subgrade works are for Package S1-1, Section 1, and Package S1-2 Section 1.

November 2021: IJM Construction Sdn Bhd, a wholly owned subsidiary of IJM Corporation Berhad, has secured three construction contracts worth MYR 680 million (USD 161.4 million): two residential high-rise developments in Kuala Lumpur and a factory in Penang. Through the first MYR 242.4 million (USD 57.54 million) contract from JKG Central Park Sdn Bhd, a wholly owned subsidiary of property developer JKG Land Bhd, IJM Construction will be responsible for the construction of two tower blocks of service apartments. The second contract, valued at MYR 55 million (USD 13 million), is for a factory.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Market

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Current Economic and Construction Market Scenario

    2. 4.2 Technological Innovations in the Construction Sector

    3. 4.3 Impact of Government Regulations and Initiatives on the Industry

    4. 4.4 Review and Commentary on the Extent of Malaysi'a Vision 2020

    5. 4.5 Comparison of Key Industry Metrics of MALAYSIA with Other ASEAN Countries (Analyst View)

    6. 4.6 Comparision of Construction Cost Metrics of MALAYSIA with Other ASEAN Countries (Analyst View)

    7. 4.7 Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Overview

    2. 5.2 Market Drivers

    3. 5.3 Market Restraints

    4. 5.4 Value Chain / Supply Chain Analysis

    5. 5.5 Porter's Five Forces Analysis

      1. 5.5.1 Threat of New Entrants

      2. 5.5.2 Bargaining Power of Buyers/Consumers

      3. 5.5.3 Bargaining Power of Suppliers

      4. 5.5.4 Threat of Substitute Products

      5. 5.5.5 Intensity of Competitive Rivalry

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Sector

      1. 6.1.1 Commercial Construction

      2. 6.1.2 Residential Construction

      3. 6.1.3 Industrial Construction

      4. 6.1.4 Infrastructure (Transportation) Construction

      5. 6.1.5 Energy and Utilities Construction

    2. 6.2 By Construction Type

      1. 6.2.1 Additions

      2. 6.2.2 Demolition and New Construction

      3. 6.2.3 New Constructions

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Market Overview

    2. 7.2 Company Profiles

      1. 7.2.1 YTL Corporation Berhad

      2. 7.2.2 IJM Corporation Berhad

      3. 7.2.3 Gamuda Berhad

      4. 7.2.4 UEM Group Berhad

      5. 7.2.5 Malaysian Resources Corporation Berhad

      6. 7.2.6 WCT Holdings Berhad

      7. 7.2.7 WCE Holdings Berhad

      8. 7.2.8 Hock Seng Lee Berhad

      9. 7.2.9 Mudajaya Group Berhad

      10. 7.2.10 Muhibbah Engineering (M) Bhd*

    3. *List Not Exhaustive
  8. 8. FUTURE OF THE MARKET

  9. 9. APPENDIX

  10. 10. DISCLAIMER

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Frequently Asked Questions

The Malaysia Construction Market market is studied from 2018 - 2027.

The Malaysia Construction Market is growing at a CAGR of >6% over the next 5 years.

YTL Corporation Berhad, IJM Corporation Berhad, Gamuda Berhad, UEM Group Berhad, Malaysian Resources Corporation Berhad are the major companies operating in Malaysia Construction Market.

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