KUALA LUMPUR, Oct 11 — The construction sector is expected to grow by 3.7 per cent in 2020, backed by the acceleration and revival of mega projects, as well as the construction of affordable homes.
According to the Economic Outlook 2020 report released by the Ministry of Finance (MoF) today, investments in mega infrastructure works, such as the East Coast Rail Link, the Light Rail Transit 3, Mass Rail Transit 2, Electrified Double Track Gemas-Johor Bahru, Klang Valley Double Track Phase 2 , Central Spine Road, Pan Borneo Highway and Coastal Highway in Sarawak, are expected to boost the civil engineering segment.
This year, the construction sector is expected to expand by only 1.7 per cent, weighed down by the subdued growth in residential and commercial properties.
The report attributed the slower growth in the residential sub-sector to the rise in property overhang caused by the mismatch between supply and demand.
Nevertheless, various measures undertaken by the government — including the plan to build 60,000 affordable houses annually within 10 years and the reinvigoration of the National Housing Policy — are expected to boost its growth by 2020.
“Additionally, Bank Negara Malaysia’s enhancement of the Fund for Affordable Homes will enable first-time house buyers to enjoy a lower monthly commitment of up to 20 per cent, which in turn will support the subsector,” it said.
The report added that the non-residential subsector’s performance next year is expected to remain subdued following a lack of initiatives on mega commercial projects.
Nevertheless, on-going commercial projects such as the Bukit Bintang City Centre, KLIA Aeropolis DFTZ Park, Kwasa Damansara, Malaysia Vision Valley and the Merdeka 118 Tower would support this sub-sector, it said.