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Hong Leong Investment Bank Research predicts that Malaysian construction contracts will maintain their growth momentum in the final quarter of this year, primarily driven by the commencement of data center and large-scale infrastructure projects. X80M steel, The research firm believes that contractors will generally continue to secure incremental orders from the data center and infrastructure sectors.
This optimistic outlook builds on the strong performance so far this year. X80M steel, Although the total domestic contract awards in the third quarter amounted to RM10.7 billion (approximately US$2.54 billion), down 16% quarter-on-quarter and slightly down 5% year-on-year, the cumulative total year-to-date has reached RM39.7 billion, up 24% year-on-year, marking the strongest nine-month performance since 2016.
Key factors driving this ongoing trend include data center projects and public sector-related works, including roads, rail, waterworks, and various private finance (PFI) projects.
The fourth quarter may see more contracts released for subcontracting and system packages for the Penang Light Rail Transit (LRT). X80M steel, Hong Leong Bank also expects more road works contracts and several engineering, procurement, construction and commissioning (EPCC) contracts in the renewable energy sector to be launched in East Malaysia in the coming months, while the East Coast Rail Link (ECRL) Section D project is also expected to be finalized before the end of the year.
Regarding the commercial segment, which includes residential projects, the agency expects fourth-quarter contributions to be at a normal level. X80M steel, It also noted that while large-scale tenders and bids have been submitted for water projects in recent months, these projects are not expected to be officially launched until 2026.
