Malaysia Construction Market Size

Malaysia Construction Market Analysis

The Malaysia Construction Market size is estimated at USD 38.55 billion in 2024, and is expected to reach USD 58.10 billion by 2029, growing at a CAGR of 8.55% during the forecast period (2024-2029).

• During COVID-19, the construction industry in Malaysia was severely affected. Most construction work, except those classified as critical or essential services, was halted throughout the Movement Control Order (MCO). Even after the MCO was lifted, contractors 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 work as initially and normally envisaged.
• The construction market has developed tremendously and now contributes significantly to the nation's overall economic growth by generating income, building capital, and creating jobs, all of which support Malaysia's socioeconomic development and gross domestic product (GDP). The main factor impeding Malaysia's building industry's expansion is financial aid. Due to their high financial requirements, construction projects deter private investors from making investments. The Government's strategy of reducing spending on significant infrastructure projects in order to reduce the nation's debt is mostly to blame for the challenges the construction industry is currently facing.
• 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.
• Due to the rising expansion of infrastructure facilities and green construction, the Malaysian construction market is anticipated to expand in the coming years. Many transportation, telecommunications, and energy projects would result in significant demand for construction equipment. As opposed to the conventional technique of creating structures, green construction conserves natural resources, produces less waste, and gives occupants healthy settings.
• 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, along with several incentives to improve employment rates and support businesses.