Government spending remains focused on infrastructure
Economic growth is solid. GDP grew 5.9 percent in 2017 and is forecast to grow 5 percent in 2018. This positive economic trend is underpinned by robust domestic and external conditions. Domestic demand is being supported by strong household consumption and rising private sector investment.
Government spending remains focused on infrastructure, but the 2018 budget also includes funds for healthcare, with medical tourism seen as a growth area.
Last year the government allocated USD1.3bn to build the Lebuhraya Persisiran Pantai Barat highway between Banting in Selangor to Taiping in Perak and plans to invest USD60.2m in a road linking Raub, Bentong, Gua Musang and Kampung Relong.
The 2018 government budget highlighted affordable housing. Among various housing programmes are plans for 210,000 homes under Perumahan Rakyat 1Malaysia Program (people’s housing programme).
|Cost escalation 2017–18:||3.0%|
|Cost escalation 2018–19:||3.0%|
|Location factor (USD):||42.7|
Infrastructure should continue to drive construction. It is forecast to account for 33 percent in 2022. In 2017 the government announced plans for 12 new power plants by 2023 and allocated USD261.6m for internet infrastructure in Sarawak and Sabah to provide all households with broadband by 2020.
Strong activity is expected in the larger cities. A government initiative expanding housing-loan eligibility among public servants is expected to boost home sales, and plans are underway to build more affordable housing.
This content is part of the International construction market survey 2018