Rising costs hitting sector harder than data suggests, works minister told

Pak Alexander Nanta Linggi, the Works Minister, has stated that the surge in construction material costs is a manageable challenge despite the ongoing global energy crisis. However, two prominent construction associations have challenged this perspective, saying the rise in costs is proving more severe than national economic data indicates.

The Master Builders Association Malaysia (MBAM) and the Bumiputera Contractors Association (PKBM) claimed that official statistics fail to accurately capture the true financial pressures experienced on construction sites. These groups argued that the sharp rise in prices of key materials, such as diesel, bitumen, and concrete, is significantly more pronounced than national averages suggest.

They pointed to specific increases, with industrial diesel prices jumping 44% and bitumen prices increasing by 42% over a six-month period. Ready-mixed concrete saw a 15% price hike, and cement a 6.7% rise. The associations also highlighted a broad spectrum of cost increases, including haulage costs up by 15% to 40%, higher labour costs due to the new minimum wage, changes in EPF contributions, and soaring copper prices.

They emphasized that these localised cost escalations directly affect project profitability, particularly for smaller and mid-sized contractors who work under fixed-price contracts. The groups are calling for increased collaboration with the Works Ministry, the Construction Industry Development Board, and the statistics department.

They proposed that industry-specific data and firsthand observations from construction sites should be integrated with national statistics to create a well-rounded approach to supporting the longevity and stability of the construction sector.