The global construction industry has faced many challenges in the last four years. The effects of skilled labour shortages, excessive lead times and supply chain disruptions were major challenges in the construction sector during the pandemic. Such circumstances have since led to implementation of structural reforms to diversify the sourcing of raw materials, manufacturing and logistics in both the public and private sectors, supporting plans for further development.

The pandemic and fears around the spread of infectious diseases were game changers for the construction industry in Asia, bringing heightened levels of awareness and improved standards on worker welfare and accommodation, particularly for countries like Malaysia that rely heavily on foreign workforce to support construction activities.

Escalation of construction overheads is one of the major challenges currently faced in the country. This surge is not solely linked to elevated standards in living spaces, amenities, safety and hygiene, but also stems from the expenses associated with repatriating foreign workers.

The pandemic prompted a notable trend of workers returning to their home countries, leading to increased demand for labourers, especially skilled workers in particular. This prompted a rise in wages as incentives to draw them back into the job market.

In 2023, the average wage rate increased by approximately 7.0 percent across various major trades compared to the previous year. In-demand skilled labourers, like bricklayers and carpenters, for example, saw an average 9.0 percent increase in wages. This trend is expected to continue into 2024 as the industry continues to face a shortage of skilled labourers. As for general labourers, the average wage rate is expected to reduce in 2024 compared to 2023 - following the return of foreign workers to meet the demands of the project pipeline.