Economic Outlook: Construction Sector Forecasts To Grow 9.4 Per Cent Next Year

KUALA LUMPUR, Oct 18 (Bernama) -- The construction sector remains resilient as it is forecasted to register a growth of 9.4 per cent in 2025, largely driven by the acceleration of strategic infrastructure projects.

According to the Economic Outlook Report 2025 released by the Ministry of Finance (MOF) today, the sector is expected to benefit particularly from civil engineering activities such as Light Rail Transit ( LRT3) Phase 2 and Sarawak-Sabah Link Road Phase 2.

Similarly, the report said the non-residential buildings subsector is projected to expand further, supported by strong demand for industrial facilities from the realisation of approved investments, coupled with the development of new industrial areas such as the Kerian Integrated Green Industrial Park (KIGIP) and Johor-Singapore Special Economic Zone (JS-SEZ).

Furthermore, the residential buildings subsector is anticipated to expand, driven by the sustained demand for affordable housing as underlined by the Ekonomi MADANI framework, alongside new development projects by the private sector.

Meanwhile, the report also highlighted that the construction sector posted a significant growth of 14.6 per cent in the first half of 2024, driven by expansion in all subsectors.

It said the civil engineering subsector continues its stellar performance, benefitting from the acceleration of ongoing infrastructure projects including the East Coast Rail Link (ECRL), Rapid Transit System Link (RTS Link) between Johor Bahru and Singapore as well as Pan Borneo Highway Sabah.

“Moreover, residential buildings and non-residential buildings subsectors also contributed to the performance on the back of increasing demand for affordable houses as well as vibrant economic activities, respectively.

“Meanwhile, the Penang South Reclamation project and the installation of electrical and piping systems supported the specialised construction activities subsector,” the report said.

The sector is also expected to continue its positive momentum in the second half of 2024, with projected double-digit growth of 13.7 per cent, while the acceleration of public infrastructure projects towards the final year of the 12th Malaysia Plan, 2021 - 2025, will further support the civil engineering subsector.

The report said the construction of data centres mainly in Johor and Selangor as well as industrial buildings is anticipated to further strengthen the non-residential buildings subsector.

“The residential buildings subsector is projected to grow, supported by increasing demand for affordable houses in line with the Government's initiatives under Budget 2024.

“This encompasses, among others, the implementation of 36 People’s Housing Programme, including 15 existing projects, which will benefit 5,100 residents, 14 People-Friendly Housing Programme to construct 3,500 housing units and new housing MADANI projects,” it said.

-- BERNAMA