Table of Contents
Timetric’s Construction in Malaysia, Key Trends and Opportunities to 2020 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 type of construction activity
- Analysis of equipment, material and service costs across each project type within Malaysia
- Critical insight into the impact of industry trends and issues, and the risks and opportunities they present to participants in the Malaysian construction industry
- Profiles of the leading operators in the Malaysian construction industry.
- Data highlights of the largest construction projects in Malaysia.
In real terms, the Malaysian construction industry registered an average annual growth rate of 10.7% during the review period (2011–2015). This growth was supported by the 10th Malaysia Plan 2011–2015, under which the government invested heavily in infrastructure, industrial parks and residential buildings. In 2010, the government relaxed policies for public-private partnerships (PPPs) with an aim to develop the country’s infrastructure. Consequently, total private investment in infrastructure projects increased from 52.0% of the total infrastructure spending in 2010 to 64.0% in 2014.
According to the Department of Statistics Malaysia (DOSM), the total construction value of civil engineering increased by 11.9% from MYR32.7 billion (US$10.0 billion) in 2014 to MYR36.6 billion (US$9.4 billion) in 2015. This was preceded by annual growth rates of 1.2%, 14.5%, 54.1% and 16.3% in 2014, 2013, 2012 and 2011 respectively.
Over the forecast period (2016–2020), the Malaysian construction industry is expected to continue to expand in real terms, supported by the government’s plan to improve the country’s transport network and tourism infrastructure, and increase the volume of renewable projects.
Moreover, government efforts to address the country’s housing shortage will help the industry to grow over the next five years. However, low oil prices are expected to impact the government’s capability to invest in major infrastructure projects. According to the Malaysian government, every US$1.0 drop in crude oil prices reduces the country’s total annual revenue by MYR300.0 million (US$76.8 million).
The industry’s output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 6.98% over the forecast period, down from 12.11% during the review period.
This report provides a comprehensive analysis of the construction industry in Malaysia. It provides:
- Historical (2011-2015) and forecast (2016-2020) valuations of the construction industry in Malaysia using construction output and value-add methods
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by project type
- Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)
- Analysis of key construction industry issues, including regulation, cost management, funding and pricing
- Detailed profiles of the leading construction companies in Malaysia
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- Identify and evaluate market opportunities using Timetric's standardized valuation and forecasting methodologies.
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- 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.
-With an aim to become a developed nation by 2020, the government is focusing on improving transport infrastructure. Under the Highway National Development Plan (HNDP), the government aims to upgrade roads in urban areas and develop alternative routes in busy areas. In 2015, the government awarded a contract worth MYR4.2 billion (US$1.1 billion) for the construction of the Sungai Besi-Ulu Kelang Elevated Expressway, Damansara-Shah Alam Highway and West Coast Expressway (WCE).
-The infrastructure construction market is expected to benefit from the government’s plan to expand the airport network under the Runway to Success 2020 (RtS2020) plan. Under this plan, the Malaysia Airports Holdings Bhd (MAHB), the state owned airport operator, plans to invest MYR7.0 billion (US$1.8 billion) to develop airport cities by 2020.
-The government’s various housing programs, such as People's Housing Program (PPR), First House Deposit Financing, Program Rumah Mesra Rakyat, 1Malaysia Civil Servants Housing project (PPA1M) and Syarikat Perumahan Negara Berhad are expected to drive forecast-period growth. In the 2016 budget, under the PPA1M, PPR and Program Rumah Mesra Rakyat, the government announced plans to build 300,000 low-cost housing units across the country.
-The government’s focus on providing affordable houses via social housing programs is expected to drive the growth of the residential construction market over the forecast period. In the 2016 budget, the government announced plans to build 175,000 affordable housing units under the 1Malaysia Housing Program (PR1MA), with an investment of MYR1.6 billion (US$389.0 million) by 2020.
-The government aims to reduce greenhouse gas emission by 40.0% by 2020. Consequently, it plans to increase the share of renewable energy in the country’s total energy mix from 2.0% in 2015 to 11.0% by 2020. For this, the government plans to build a 1,250MW solar power plant and a 1,250MW biomass plant by 2020 under the PPP model.
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