Malaysian build sector set for 'energetic and enthusiastic' 2015
Published on 07/01/2015
The Malaysian building sector is set to continue expanding in 2015 as new projects, foreign investment and increased outlooks among construction firms stimulate the industry and the wider economy.
That is the key finding in the new Equity Strategy Outlook 2015 report by M&A Securities, which notes that new projects will help to spearhead the sector in the coming months and ensure an "energetic and enthusiastic" 2015.
Key to the success of the industry will be new infrastructure projects, which will not only create new transport routes in the nation, but stimulate the construction of new residential and commercial buildings that take advantage of new routes.
Bigger picture
The wider plan in Malaysia is to create a number of hubs that will prove attractive to businesses looking to invest, and as such the government is placing an increased emphasis on developing new urban centres from the ground up, as well as enhancing existing areas to help galvanise the nation's economic expansion.
Central to these ambitions will be the development of an efficient and integrated public transportation system, which could see construction sector real output help to boost gross domestic product (GDP) by around 10.7 per cent in 2015.
Some of the projects currently underway include the new KVMRT2 and LRT3 routes, the Pan-Borneo Highway, and the West Coast Expressway, though several others are on the verge of being greenlit, such as the Eastern Klang Valley Expressway, the Damansara-Shah Alam Highway, the Sungai Besi-Ulu Klang Expressway, and the upgrading of the East Coast railway.
These projects will cost around 120 billion RM ($34 billion) to come to fruition, before the spending on new buildings and other developments is even factored in, but the government is confident that the outlay will continue to not only boost the country and its potential as an investment destination, but the construction sector itself due to the sheer amount of activity and capital being allocated to it.
Attracting attention
The country is already attracting a significant amount of attention from overseas, most notably from China, with Chinese Premier Li Keqiang recently reiterating his country's interest in participating in the Kuala Lumpur-Singapore high speed rail project in a meeting with Prime Minister Datuk Seri Najib Tun Razak in Beijing.
Meanwhile, commenting on the residential construction outlook for 2015, Malaysia Building Society Bhd president and CEO Datuk Ahmad Zaini Osman said he expects the property market in particular to remain sustainable, with demand largely unimpeded.
"I think our building materials, in term of currency, won’t be much affected. I foresee that the property sector will remain sustainable next year. Overall, there will be enough demand and supply."
In the medium term, analysts expect Malaysia’s construction sector to be underpinned by a positive long-term outlook and major infrastructure projects backed by both the government and private sector, which will prove a catalyst for further projects in both the residential and commercial sphere and continue the country's domestic and economic expansion.