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

Works minister Alexander Nanta Linggi recently claimed that rising construction material costs are manageable despite the global energy crisis, and that contractors can still proceed with projects without facing delays. However, two construction groups, the Master Builders Association Malaysia (MBAM) and the Bumiputera Contractors Association (PKBM), have argued that the national-level statistics do not accurately represent the true cost pressures faced by construction companies.

These associations contend that the broad averages fail to capture the operational challenges encountered at the ground level, particularly due to significant price hikes in essential materials.

MBAM and PKBM highlighted a series of cost increases in their joint statement, including a 44% rise in industrial diesel prices, a 42% increase in bitumen costs, and a 15% uptick in the price of Grade 30N ready-mixed concrete. Additionally, the price of a 50kg bag of ordinary Portland cement surged by 6.7% from June to July. These groups also noted that haulage costs have risen by 15% to 40% following stricter transport regulations implemented since October 2025, while labour and operational expenses have climbed due to the implementation of the RM1,700 minimum wage, EPF changes for foreign workers, and record copper prices.

The associations specifically pointed out that many contractors work under fixed-price contracts signed before these cost adjustments took effect. Consequently, these local price surges directly affect project delivery margins, especially for small- and mid-sized contractors. They urged for greater collaboration between the works ministry, the Construction Industry Development Board, and the statistics department, proposing that industry data and on-site observations be integrated alongside national statistics.

By combining micro-level industry information with broader statistical data, they aim to create a more balanced and comprehensive framework to support the sustainability of the construction sector.