Construction in Malaysia - Key Trends and Opportunities to 2022

Synopsis

In real terms, the Malaysian construction industry registered positive growth during the review period (2013-2017), supported by large-scale investments under the government's 10th Malaysia Plan 2011-2015. Under this plan, the government invested MYR175.0 billion (US$44.8 billion) to develop the country's overall infrastructure by implementing various projects in the transport, tourism, telecommunications, education, healthcare and retail sectors.

Over the forecast period (2018-2022), the industry is expected to expand, albeit at a relatively slow pace. The industry's expansion is expected to be supported by the government's ongoing efforts to promote economic growth through large-scale investments under the 11th Malaysia Plan (11MP) 2016-2020. This plan is part of the government's aim to achieve the status of a developed economy by 2020. 

The industry is expected to remain vulnerable to fluctuating oil prices, as it heavily relies on oil sector revenues to finance infrastructure projects. The government is gradually taking measures to diversify the economy in order to reduce its dependence on the oil sector. The industry's output value in real terms recorded a compound annual growth rate (CAGR) of 8.73% during the review period, and is expected to post a forecast-period CAGR of 6.48%.


Summary

Timetric's Construction in Malaysia - Key Trends and Opportunities to 2022 report provides detailed market analysis, information and insights into the Malaysian construction industry, including:

• The Malaysian construction industry's growth prospects by market, project type and construction activity

• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Malaysian construction industry

• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline


Scope

This report provides a comprehensive analysis of the construction industry in Malaysia. It provides:

• Historical (2013-2017) and forecast (2018-2022) valuations of the construction industry in Malaysia, featuring details of key growth drivers.

• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector

• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline. 

• Listings of major projects, in addition to details of leading contractors and consultants


Reasons To Buy

• Identify and evaluate market opportunities using Timetric's standardized valuation and forecasting methodologies.

• Assess market growth potential at a micro-level with over 600 time-series data forecasts.

• Understand the latest industry and market trends.

• Formulate and validate strategy using Timetric's critical and actionable insight.

• Assess business risks, including cost, regulatory and competitive pressures.

• Evaluate competitive risk and success factors.

Key Highlights

• According to Timetric, the infrastructure construction market is expected to maintain its leading share in the industry over the forecast period, to account for 33.0% of the industry's total value in 2022. In October 2017, the government allocated MYR5.0 billion (US$1.3 billion) for the construction of Lebuhraya Persisiran Pantai Barat highway between Banting in Selangor to Taiping in Perak. Additionally, the government announced plans to invest MYR230.0 million (US$60.2 million) to develop new central spine road project which will establish a link between Raub, Bentong, Gua Musang and Kampung Relong. 

• Under the 2018 budget, the government is focusing on the ongoing affordable housing initiatives. Accordingly, the government announced plans to develop 210,000 housing units under Perumahan Rakyat 1Malaysia Program, 25,000 housing units under the 1Malaysia Civil Servants Housing Program, 17,300 housing units under the People's Housing Program, 3,000 housing units under the People's Friendly Home Program, 2,000 housing units under the My Deposit Program and 600 housing units under the My Beautiful New Homes Program.

• In line with the growing energy demand, in early 2017 the government announced plans to develop 12 new power plants in the country by 2023, with a total installed capacity of 9,171MW.

• Timetric expects the industrial construction market to register a forecast-period CAGR of 7.33% in nominal terms, supported by the government's effort to transform the country's manufacturing sector into a more diverse and high-value sector by 2020. Accordingly, the government aims to focus on the development of sub-sectors such as chemicals, machinery and equipment, and electronics.

• In order to equip all the households with a broadband connection by 2020, the government launched High-Speed Broadband 2 (HSBB 2) and Suburban Broadband (SUBB) programs under the 11MP 2016-2020. As a part of the move, in the 2018 budget, the government allocated MYR1.0 billion (US$261.6 million) to develop internet infrastructure in the states of Sarawak and Sabah.

• The CIC is tracking large-scale construction projects in Malaysia with a combined total value of MYR2.78 trillion (US$647 billion), 50% of which is in the execution stage. Foreign contractors are involved in projects with a value equivalent to 38% of the total project pipeline.