KUALA LUMPUR: Malaysia's construction sector is poised for significant growth and an increase in job opportunities in the second half of 2024, fueled by large-scale infrastructure projects.
Key drivers of this expansion include major initiatives like the Penang Light Rail Transit (LRT) and the Mass Rapid Transit 3 (MRT3) projects in the Klang Valley region.
The industry's favourable operating conditions are further supported by continued demand for industrial facilities such as warehouses, data centers, and semiconductor plants, according to Vitaly Berezka, regional spokesperson for PlanRadar.
He noted that in addition to the Penang LRT and MRT3, the local construction sector will also gain momentum from other significant projects, including the East Coast Rail Link (ECRL), the Pan Borneo Highway, and the Iskandar Malaysia development.
The ECRL will strengthen connectivity between the East and West Coasts of Peninsular Malaysia, fueling economic growth, he told Business Times.
"Similarly, we anticipate that the Pan Borneo Highway will further enhance connectivity across Sabah and Sarawak, while the Iskandar Malaysia development will see growth through new residential, commercial, and industrial projects," he said.
"As a result, a positive outlook is forecast for Malaysia's construction sector in the near future."
Prime Minister Datuk Seri Anwar Ibrahim said last month that the total number of approved investments from January till June this year rose 18 per cent to RM160 billion compared with the same period last year.
These investments involved nearly 3,000 new projects that will open over 79,000 job opportunities for Malaysians, he said in his speech at Khazanah Nasional Bhd's 30th anniversary.
The approved investments in 2023 totalled RM329.5 billion, up 23 per cent from RM267.7 billion in 2022. Of the total, 57.2 per cent of the approved investments came from foreign capital and 42.8 per cent from domestic investments.
Berezka said that with the rise in investments, especially in construction projects, there is mounting pressure for companies to adhere to sustainable practices, especially those receiving green funding.
"Financial institutions and investors now prioritise sustainability in their lending criteria, requiring projects to meet strict environmental standards to qualify. This pressure aligns with government policies and international commitments, such as Malaysia's goal to achieve net-zero carbon emissions by 2050.
"As a result, construction companies must adapt to these sustainability goals to maintain access to crucial funding and market opportunities," he said.
Berezka also said that technology is pivotal in aligning projects with sustainable principles while ensuring strong returns for investors.
Digital construction management tools like building information modelling (BIM), the internet of things (IoT), and artificial intelligence have been shown to facilitate precise planning and simulation, optimising resource use, reducing waste, and enhancing energy efficiency.
"These tech-driven efficiencies not only support sustainability goals but also deliver cost savings and value—proving that sustainable construction is both environmentally responsible and financially viable," he said.
Meanwhile, he noted a noticeable uptick in construction activity across Southeast Asia, largely driven by substantial investments in public infrastructure and transportation projects.
The South-East Asia construction market size revenue reportedly is projected to reach US$538.5 billion in 2024 and is expected to grow at a compound annual growth rate (CAGR) of more than 6.0 per cent per annum.
He said this growth is primarily attributed to strategic infrastructure investments and economic development initiatives across the region.
'"Countries like Malaysia, Indonesia, and the Philippines are among the biggest construction markets, driven by their focus on enhancing transportation networks, energy infrastructure, and urban development, he said.
"The ongoing industrialisation and expansion of cities in these countries are also significant factors, as they create demand for renewed or expanded civil infrastructure, transportation, commercial and residential building development, and large-scale energy infrastructure."
Berezka said that governments are prioritising these developments to foster economic growth, enhance connectivity, and tackle urbanisation issues.
These projects are crucial for regional integration, reducing traffic congestion, and boosting economic resilience.
While this increase benefits the construction sector through heightened activity and revenue, it also brings challenges, including potential resource shortages, environmental sustainability concerns, and the need for improved project management to prevent delays and cost overruns.
We are seeing that the growing demand for materials, labour, and technological innovations presents opportunities for construction firms but also intensifies competition for resources and requires skilled workers to manage complex projects effectively.