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Report
Malaysia Construction - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2020-2029
Market Report I 2024-02-17 I 120 Pages I Mordor Intelligence
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).
Key Highlights
-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.
Malaysia Construction Market Trends
Investments in Infrastructure Sector to Boost Construction Activity
The Malaysian construction sector has experienced a significant boost due to the revival of several large-scale infrastructure projects. This has led to a 20.74% year-to-date increase in the construction stocks index on Bursa Malaysia, reaching a two-year high as of November 27, 2023.
The construction index on the exchange rose to 184.19 from 152.51 in January 2023, marking the highest level since April 14, 2021.
The government's acceleration of mega projects, particularly in rail and road network infrastructure, has been the driving force behind this growth, enhancing mobility and stimulating economic activities.
Key infrastructure projects in the country include the 5G rollout, East Coast Highway 3, flood-mitigation projects, West Coast Expressway, East Coast Rail Link, Central Spine Road, Mass Rapid Transit 3 (MRT3), Bayan Lepas Light Rapid Transit (BLLRT) in Penang, the remaining Pan Borneo Highway, and the Johor-Singapore Rapid Transit System.
Increase in Residential Constructions To Drive the Construction Market
Construction activity in Malaysia has increased for the fifth consecutive quarter, although the growth rate has slowed in the second quarter of 2023.
According to data from the Department of Statistics Malaysia (DOSM), the value of work done in the construction sector rose by 8.1 percent year-on-year to MYR 32.4 billion (USD 7.05 billion) from April to June 2023.
The growth in construction output was primarily driven by increased work in the residential sector, which saw a rebound and a 6.9 percent year-on-year expansion. Additionally, special trade activities experienced a faster rise of 9.8 percent year-on-year.
However, civil engineering, which makes up the largest proportion of the sector's output, grew at a slower rate of 10.4 percent year-on-year.
The growth was the slowest in four quarters mainly because of the higher base due to the value of work done was more or less the same, hovering around MYR 12.1 billion (USD 2.59 billion) in the three quarters to Q2-2023.
By project owners, private sector output, which accounted for 63.1% of total output, rose faster by 17.3 percent y-o-y (Q1 2023: +10.6 percent yoy), while the progress of construction project developments under the government recorded zero yoy growth (1Q2023: +6.1 percent y-o-y) or unchanged from Q1 of 2023.
Malaysia Construction Industry Overview
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's Construction Market are YTL Corporation Berhad, IJM Corporation Berhad, Gamuda Berhad, UEM Group Berhad, and Malaysian Resources Corporation Berhad.
Additional Benefits:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
1 INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Market
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
4.1 Current Economic and Construction Market Scenario
4.2 Technological Innovations in the Construction Sector
4.3 Impact of Government Regulations and Initiatives on the Industry
4.4 Review and Commentary on the Extent of Malaysia Vision 2020
4.5 Comparison of Key Industry Metrics of Malaysia with Other ASEAN Countries
4.6 Comparison of Construction Cost Metrics of Malaysia with Other ASEAN Countries
4.7 Impact of COVID-19 on the Market
4.8 Market Dynamics
4.8.1 Market Drivers
4.8.1.1 Rise in Demand of Residential Property
4.8.1.2 Increase in Infrastructure Projects
4.8.2 Market Restraints
4.8.2.1 Increase in Cost of Raw Materials
4.8.3 Market Oppurtunities
4.9 Value Chain / Supply Chain Analysis
4.10 Industry Attractiveness - Porter's Five Forces Analysis
4.10.1 Bargaining Power of Suppliers
4.10.2 Bargaining Power of Buyers/Consumers
4.10.3 Threat of New Entrants
4.10.4 Threat of Substitute Products
4.10.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
5.1 By Sector
5.1.1 Commercial Construction
5.1.2 Residential Construction
5.1.3 Industrial Construction
5.1.4 Infrastructure (Transportation) Construction
5.1.5 Energy and Utilities Construction
5.2 By Construction Type
5.2.1 Additions
5.2.2 Demolition and New Construction
6 COMPETITIVE LANDSCAPE
6.1 Market Overview
6.2 Company Profiles
6.2.1 YTL Corporation Berhad
6.2.2 IJM Corporation Berhad
6.2.3 Gamuda Berhad
6.2.4 UEM Group Berhad
6.2.5 Malaysian Resources Corporation Berhad
6.2.6 WCT Holdings Berhad
6.2.7 WCE Holdings Berhad
6.2.8 Hock Seng Lee Berhad
6.2.9 Mudajaya Group Berhad
6.2.10 Muhibbah Engineering (M) Bhd*
7 FUTURE OF THE MARKET
8 APPENDIX
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