KUALA LUMPUR: The construction sector is expected to see increased job flows in the second half of this year (2H 2025), driven by the gradual rollout of major public-sector infrastructure projects, said MBSB Investment Bank Bhd.
In a note today, the investment bank said earnings visibility is expected to improve in 2H 2025, supported by active industrial job flows such as the Penang light rail transit (LRT) Mutiara Line and data centre prospects, alongside the multi-year public infrastructure roadmap under the 13th Malaysia Plan (13MP).
It said the Penang LRT has officially commenced following the issuance of Notice to Proceed, while land acquisitions for Mass Rapid Transit 3 (MRT3) are underway, unlocking the RM31 billion civil works portion of the project pipeline.
Demand for data centres also remains structurally strong, with contractors continuing to secure hyperscale mandates as part of Southeast Asia’s digital infrastructure boom, underpinned by robust leasing activity, cost competitiveness, and long-term client partnerships.
“Overall, we view this as a positive development despite the headwinds faced by the construction sector in 1H 2025, stemming from delays in project rollouts within the pipeline and global trade tensions,“ it said.
MBSB Investment has maintained its 'positive' stance for the sector, citing a combination of easing cost pressures, resilient private-sector demand, and improved public project execution.
The bank noted that steel bar prices have continued to decline, down 9.91 per cent year-to-date and 19.5 per cent year-on-year, despite recent monthly fluctuations, while cement prices remain stable due to disciplined domestic production and raw material cost control, ensuring a favourable cost environment for contractors.
“These cost dynamics, combined with the gradual easing of labour constraints and the ability to pass through the Sales and Service Tax and tariff-related costs, continue to support profitability in ongoing projects.
“Momentum is also improving on the demand side,“ it added. - Bernama
