Charting the journey ahead
Elevating Malaysia’s construction landscape: adapting to trends and embracing innovation
Our first Malaysia market intelligence report brings together insights on the construction sector and the outlook for 2024, as Malaysia continues to invest in development, remains attractive to foreign investment and provides equitable access to infrastructure and wealth across the country.
The global construction industry emerged successfully from the pandemic's shadow. Although making progress, the Malaysian Construction Industry has not been exempt from the impact of COVID-19. Stakeholders within the industry are encouraged to proactively address the evolving landscape marked by economic fluctuations, geopolitical tensions, rising interest rates, shortages in skilled labour, and escalating costs.
Driven by investments in large-scale infrastructure, high technology, manufacturing and data centre projects, the construction industry's anticipated growth is expected to bolster job creation and income generation. The Malaysia Budget 2024, unveiled on 13 October 2023, allocates MYR90bn for developmental initiatives to reinforce employment rates and support businesses.
Highlighted in the Twelfth Malaysia Plan, the Public-Private Partnership (PPP) framework is set to enhance efficiency and bring value to stakeholders, thereby encouraging heightened private sector involvement in national development undertakings. This mode of procurement is set to be the preferred route for significant projects like the Malaysia-Singapore High-Speed Railway (HSR).
For the transformation of Malaysia's construction sector from a labour-intensive traditional sector, to a more technology-driven landscape to be fully realised, embracing innovation is vital. Adopting and adapting technologies like Building Information Modelling (BIM) and the Industrialised Building System (IBS), as outlined in the National Construction Policy 2030, will be pivotal in enhancing productivity, quality and diminishing inefficiencies.
Advancing sustainability is a key facet of the Twelfth Malaysia Plan, which aims to steer economic practices toward sustainability by addressing climate change and reducing uncontrolled consumption and production patterns. This is poised to integrate sustainability at the heart of construction projects in 2024 and beyond, eventually driving the demand for eco-friendly and sustainable construction materials and equipment.
A transition is evident within the construction industry: moving towards collaborative contracting models, an acknowledgement of the need for greater efficiency and synergy from the conventional adversarial approach. In this challenging environment, a strategy prioritising outcomes and leveraging common ground helps mitigate disputes and prioritise timely, budget-conscious completion. CIDB Malaysia's recent launch of its Standard Form of Contract for Building Works 2022 Edition is an example of a step forward in promoting collaborative contracting practices within the country.
Going forward, industry stakeholders need to embrace technology, innovation, sustainability, and collaboration for more effective project delivery. As the industry strides into the future, new challenges loom. Companies that proactively equip themselves to address these changes will be well-positioned to navigate the shifting landscape, attaining a competitive edge.
“Due to the rising expansion of infrastructure facilities and green construction, the Malaysian construction market is anticipated to expand in the coming years. The numerous large-scale infrastructure, high-tech, manufacturing and data centre projects will result in significant demand for construction equipment and materials.”
Dr. Ong See Lian Director and Strategic Advisor, Turner & Townsend
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