Construction industry groups say macro data don't reflect operational costs on the ground
KUALA LUMPUR: Construction industry groups have warned that contractors are facing significant cost pressures despite broader data suggesting the overall impact of higher input costs on the sector remains contained.
In Malaysia, construction industry associations have voiced concerns that the broader economic indicators do not accurately capture the true operational challenges faced by contractors on the ground. The Master Builders Association Malaysia and the Bumiputera Contractors Association noted that several key construction inputs have seen significant price hikes in recent months, putting strain on project margins.
Despite Works Minister Datuk Seri Alexander Nanta Linggi's assertion that higher construction material costs are manageable amid the global energy crisis, the groups emphasized that the reality on the ground differs. For instance, industrial diesel prices surged by 44% to RM4.26 per litre, while bitumen prices climbed 42% to RM3,025 per tonne from February to July 2026.
Other factors contributing to increased costs include the RM1,700 minimum wage, changes to the Employees Provident Fund for non-Malaysian workers, and soaring copper prices. These price surges have been particularly difficult for contractors working on fixed-price contracts, as they directly affect delivery margins, especially for small and mid-sized firms.
The associations stressed the importance of incorporating local industry data and firsthand observations from project sites into policy decisions, urging a more nuanced understanding of construction costs to ensure industry sustainability.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
