Construction industry has 'strong' boom
With many projects coming on stream, industry expects 20 per cent growth year on year
The construction industry of Malaysia is experiencing a “strong boom time” that will see even stronger growth, moving forward, as more projects come on stream, Construction Industry Development Board (CIDB) chief executive Judin Abdul Karim said.
Judin said he expected the industry to experience year-on-year growth of at least 20 per cent this year compared with an expansion of about 19 per cent in the first half.
“As you can see, many more projects are coming on stream. So we expect very robust growth as trends from data released show that it is pointing upwards.
“We did not anticipate the growth to be as big as that but the figures released by Bank Negara [central bank of Malaysia] show that growth for the first half of this year was at 18.9 per cent,” Judin said at a briefing on CIDB’s Regional Construction Week 2012.
He said as the projects were only beginning to come on stream, as time goes on, there would be more activities.
“This is for the construction industry in general. Activities are now getting more intensive. If you look at the Mass Rapid Transit (MRT) project, they are now clearing the land and beginning to start some earthwork,” he said.
“Further down the line, when they bring in the segments and equipment, there will be more activity.”
Judin said the construction industry had experienced rapid growth of 15.5 per cent in the first quarter and 22.2 per cent in the second quarter.
“The multiplier effect of the construction industry is great because there are so many other industries involved. When we spend 1 ringgit in construction, there are so many parties involved in [the chain]. A ringgit spent in construction goes to many hands.
“The spin-offs are great, that is why the timing of these projects have managed to grow our economy as a country with respectable growth in the first half. This way, we don’t really have to suffer much from the slowdown in the euro zone and the United States,” Judin added.
He said the Mass Rapid Transit and the proposed Kuala Lumpur-Singapore high-speed train projects had the potential to create huge economic multiplier effects.
“From an economic and strategic-alliance point of view, the high-speed train between the two cities is good. Why not have two [cities] serving this region rather than just two separate entities. We synergise [well], we can get it right,” he said.
He added that another high-impact project, which would have strong multiplier effects, was the Petronas Refinery and Petrochemical Integrated Development in Pengerang, Johor.
Meanwhile, Judin said affordable housing, which was “still elusive”, would drive construction in the property sector when demand for high-end properties slowed down.
“When business is still good and there is feel-good factor, people buy properties. It is when the economy slows down that you expect prices to cool off.
“Affordability is another issue which the government is addressing, as prices of houses are getting out of reach,” he said.
