Positive construction sector in 2016 amidst global uncertainty
KUALA LUMPUR: Despite global economic uncertainties, the construction industry showed remarkable performance in 2016, led by the infrastructure category which topped the list of projects registered with the Construction Industry Development Board (CIDB).
As of November, 5,024 projects worth RM121 billion were registered with CIDB and more are expected to come towards the year-end.
“Between January and November, the value of projects increased 36 per cent to RM121 billion while the number of projects showed a contraction of 3.0 per cent to 5,024 projects,” chief executive officer Datuk Ahmad Asri Abdul Hamid told Bernama.
And, almost half of the construction projects awarded ( 47 per cent) came from the infrastructure category, followed by residential, non-residential and social amenities.
The volume of projects awarded were mostly contributed by 14 mega projects valued at more than RM1 billion each, with a combined total of approximately RM35 billion.
“Out of 14 mega projects, 12 projects, valued at RM33 billion, were infrastructure projects mainly attributable to the PanBorneo Highway and the MRT2 project packages.
“This is in line with the government’s focus to improve public transportation under the 11th Malaysia Plan period beginning 2016 until 2020,” Ahmad Asri added.
Meanwhile, the construction industry is expected to grow 8.7 per cent this year compared with 8.2 per cent in 2015.
In the third quarter, the industry registered a growth of 8.2 per cent.
As for residential and nonresidential projects, both categories took a backseat in 2016, receiving the brunt from global uncertainties
Some of the external developments which had a hard hitting impact were the outcome of Brexit and the US presidential election; tightening of loans by financial institutions; overhang of existing stocks of houses; depreciation of the Ringgit and the wait-and-see approach adopted by consumers.
Moving into 2017, Ahmad Asri said the outlook for the construction industry, expected to grow by 8.3 per cent, looked encouraging as the expected improvement in the domestic economy would be parallel to world economic recovery.
“The MRT2 (Sg Buloh-SerdangPutrajaya) and Menara Warisan Merdeka projects are anticipated to contribute significantly in the upcoming years.
“As they are newly awarded projects and being awarded in packages, the impact of both projects are yet to be seen in 2016,” he said.
Both projects are expected to enhance the construction sector’s performance and boost activities, through commercial and housing development around the surrounding areas.
“A new connectinginfrastructure will serve the transportation demand of the increasing population and reduce traffic congestion while a new commercial landmark will bring new business opportunities and stimulate economic growth,” he added.
Based on CIDB database, Ahmad Asri said 22 packages of the MRT2 project, valued at RM24.1 billion, and 10 packages of Menara Warisan Merdeka project, worth RM3.8 billion, have been awarded.
“Under the 2017 Budget, the government will continue to fork out various means of financial assistance, subsidies and incentives to stimulate the housing sector, particularly construction of affordable housing,” he said.
This will help develop and boost domestic economic growth while encourage house ownership. — Bernama