Construction sector to expand 13.9 pct in 2021 - MOF

The civil engineering subsector will continue to be the main driver of the sector, the Finance Ministry (MoF) said in its Economic Outlook 2021 report released today.

“The major infrastructure projects include Mass Rapid Transit 2, Light Rail Transit 3, West Coast Expressway and Bayan Lepas Light Rail Transit as well as Pan Borneo and Coastal Highways in Sarawak,” MoF said.

Meanwhile, utility projects include the Langat 2 Water Treatment Plant, Baleh Hydroelectric Dam and Sarawak Water Supply Grid Programme (Phase 1).

For the residential subsector, it is anticipated to improve supported by various measures taken by the government to address the property overhang situation.

Among the measures are the extension of Home Ownership Campaign, exemption of Real Property Gains Tax, the introduction of Rent-To-Own scheme as well as reduction of foreign ownership threshold.

“The performance of the non-residential subsector is expected to recover marginally, supported by on-going commercial projects, including Bukit Bintang City Centre, Cyberjaya City Centre, Forest City and Malaysia Vision Valley 2.0,” MoF said.

Meanwhile, in the first half of 2020, the construction sector shrank by 25.9 per cent and it is expected to contract by 11.8 per cent in the second half with all segments declining significantly.

“At the same time, prolonged property overhangs continue to weigh down the performance of the sector.

“However, civil engineering and specialised construction activities subsectors are expected to improve gradually, cushioned by various measures under the economic stimulus packages,” MoF said.

Overall, for 2020, the sector is projected to contract by 18.7 per cent.