Impact of 11MP review

The revision of various mega projects and the projected sector slowdown globally will lead to slower growth for the Malaysian construction industry in 2019, according to a report by The Malaysian Reserve.

However, the sector is still among the biggest contributors to the nation’s GDP.

Last year, the construction industry reported a growth of 6.7 per cent and contributed 5.9 per cent to the GDP.

According to the midterm review of the 11th Malaysia Plan (11MP), the allocation for the development expenditure ceiling will be lowered to RM220 billion.

Moving forward, the government is expected to embark on initiatives to move up the value chain and become a productivity-driven economy, said Deputy Works Minister Mohd Anuar Mohd Tahir at the Asean Super 8 launch in Kuala Lumpur on 25 October.

“To achieve this, one of the key strategies identified is by fostering sustainable practices and enhancing knowledge content to transform the construction sector,” he said.

In line with the 11MP, the Construction Industry Transformation Programme 2016-2020 was launched to transform the industry into a modern, highly productive and sustainable industry that also prioritises safety.

“The transformation is still on-going, and the ultimate goal is to create a construction industry that is on par with developed nations, with industry players that are able to compete confidently on the global stage,” Mohd Anuar added.

This is possible if the private sector double up on productivity and further advance the adoption of the industrialised building system (IBS) in private projects, which make up 80 per cent of construction works.

According to CIMB IB Research, a slight positive arising from the mid-term review is the federal government’s strengthening of the public-private partnership (PPP) model for contract procurement.

“This is most relevant to selected small/medium-sized contractors, but we believe the tender environment will be very competitive (as there are many idle capacity construction firms),” the research report reads. — Construction+ Online

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