KUALA LUMPUR: The government is supporting the construction sector through various initiatives that will enable the sector to recover from the impact of economic crises.
The Economic Outlook 2023 said a series of economic crises had caused Malaysia's construction sector to perform inconsistently over the last four decades.
"The commodities shock in 1985/1986, Asian Financial Crisis (AFC) in 1997/1998, Global Financial Crisis (GFC) in 2008/2009 and the Covid-19 pandemic had brought significant repercussions to the sector and the economy as a whole.
"The sector was badly affected either from the cancellation or postponement of major construction projects," said the report.
Given the sector's contribution and its significant spillover effects to other sectors of the economy, the government had taken actions to mitigate the negative impacts of the crises, it added.
This included initiatives such as initiating public infrastructure projects and providing policy support to rejuvenate the sector.
The report noted that the sector had experienced robust growth during the period from 1991 to 2020 with an average annual growth rate of 7.2 per cent.
It contributed to the national gross domestic product (GDP) with an annual average share of 3.9 per cent.
"Although the contribution is relatively small, it provides a valuable multiplier effect to the aggregate economy attributed to its extensive backward and forward linkages with other sectors. Thus, as a developing nation, the sector's contribution remains significant in ensuring a sustainable economic growth," it said.
The report said the issues and challenges addressed by the sector had made sector more resilient.
The adoption of automation, digitalisation and environmental, social and governance policies as well as creating relevant skills and expertise would transform the sector to keep abreast with emerging demands in the economy.
"Thus, the importance of boosting the sector's development and growth will not only contribute to the GDP, but also gear the industrial players to become major global competitors," it said.