The construction industry in Malaysia has been wading through COVID-19 and all the disruptions it has brought. Construction commencements declined by 19.39 per cent to 58.28 per cent in 2020. Nationwide lockdowns were imposed, allowing only critical construction work during the strictest implementation of the Movement Control Order (MCO). Some of the interruptions or additional protocols were acquiring a new permit to operate and close construction sites. Adding to the pressure were the rising costs of building materials, especially iron, and workforce shortages.
Several initiatives that centre on infrastructure, renewable energy and telecommunications have supported the projections for 2021 and beyond. Total construction starts for 2021 are estimated to have a 16.43 per cent increase year-on-year, reaching MYR67,855 million. The contribution of the building sector leads this with over 60 per cent of the total value at MYR45,176 million. While there is less civil sector input, the segment is projected to register a 48.50 per cent year-on-year change amounting to MYR22,680 million.
In Malaysia’s Budget 2021, the emphasis was given to public infrastructure developments that would bring about more opportunities as these extend to different sectors of the economy and become catalysts for growth. The Jalinan Digital Negara (JENDELA) project that plans to provide better connectivity quality and service is a crucial telecommunications development to watch out for. In line with boosting renewable energy sources, the Large-Scale Solar (LSS) programme continues with LSS 4, adding to a list of significant projects. Likewise, investments from the private sector, including foreign direct investments, propel the construction industry’s prospects with projects such as the SK Nexilis Copper Foil Factory at KKIP IZ 9.
Home to several economic corridors, Malaysia promotes its development and amass significant investments from these areas. The residential sector is seen to perform with a 6.08 per cent increase to MYR22,628 million in 2021 and a decline by 1.67 per cent in the first half of 2022 as concerns with the supply overhang linger. Meanwhile, industrial is projected to continue on a positive trajectory in 2021 until the first half of 2022, partly due to strengthening capacities. The forecast is projected to be at MYR33,708 million, a 6.65 per cent rise compared to the same period in the previous year. Despite a subdued performance throughout 2021, optimism is seen in retail, hospitality and office commercial sectors in the first half of 2022 as vaccination rates increase and restrictions are lifted.