Construction sector set to expand 8.7% in 2016

KUALA LUMPUR (Oct 21): The construction sector is expected to expand 8.7% in 2016 compared with 8.2% last year, said the Ministry of Finance in its 2016/2017 Economic Report, Bernama reported today.

The report showed that the value-add of the construction segment recorded strong growth of 8.4% in the first half of 2016 (1H2016) compared 7.6% over the same period last year. This was underpinned by growth in civil engineering works, residential activities and the non-residential sub-sector.

"Overall, these three property sub-sectors contributed the highest share (more than 80%) of all construction activities," the report said.

Bernama also reported that the value of construction works completed in 1H2016 expanded 11.4% to RM62 billion with 11,881 projects (Jan-June 2015:11.6%; RM56 billion; 12,158 projects).

Of the total value, civil engineering contributed 33.2% to the construction works, followed by non-residential (32.1%), residential (29.8%) and specialised construction activities (4.9%), the report said.

"The civil engineering sub-sector recorded double-digit growth of 21.4%, supported by investments in petrochemical industries and ongoing infrastructure works (Jan-June 2015: 2.9%).

"Meanwhile, the residential sub-sector grew 10.4%, prompted by steady growth in incoming supply at 13.1 per cent to 816,174 units, (Jan-June 2015:13.5%; 10.3%; 721,730 units).

The Klang Valley contributed the bulk of the , accounting for 26.2% compared to 25.6% in 1H2015 due to increasing affordable housing schemes," it added.

Construction in the non-residential segment grew at a moderate pace of 3% in the 1H2016 compared with 19.8% over the same period last year, Bernama reported.

This was due to a greater decline in construction starts, especially in the industrial (-77.1%), shopping complexes (-43.6%) and shops (-36.5%) segments compared with Jan-June 2015 (-21.5%; 618.7%; 156.7%).   

The private sector continued to dominate construction activity with a share of 66.3% in 1H2016.

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