KUALA LUMPUR: Malaysia’s construction sector solidified its position as a key driver of economic growth this year, thanks largely to increased civil engineering infrastructure jobs.
Besides the continuation of East Coast Rail Link (ECRL), Rapid Transit System (RTS) and Pan Borneo Highway, the construction of data centres has added to the hive of construction activity.
Work related to the projects helped the sector grow 19.1% in the first 11 months of 2024, with the buoyant sentiment leading to an optimistic outlook for 2025.
In the first three quarters, a total of RM116.8 billion in work value was completed, with the civil engineering subsector leading the way, according to the Department of Statistics Malaysia. The projects comprised strategic investments and initiatives focusing on connectivity, sustainability and digital transformation.
Thanks to the government’s emphasis on infrastructure development, the sector attracted substantial domestic and foreign investments, setting the stage for long-term growth.
The upbeat sentiment in construction was reflected in the Bursa Malaysia Construction Index, which reached a high of 316.83 as at July 18, after starting the year at 193.83 on Jan 2.
Key developments this year included the mammoth ECRL project being 80% completed by November while the RTS connecting Johor Bahru and Singapore was 83% complete as of Aug 20.
As for the Pan Borneo Highway in Sabah and Sarawak, it is set to enhance regional connectivity with Phase 1B recently launched, promoting economic integration across the area.
The growth of the construction industry has closely aligned with advancements in digital technology, including big data and artificial intelligence (AI), which have significantly boosted demand for data centres.
The decision by global corporate giants such as Microsoft, Amazon Web Services (AWS) and Google to pick Malaysia for their data centre expansion reinforces the country's position as an ideal foreign investment destination. Pull factors included the country’s strategic location, robust infrastructure and supportive government policies.
Undeniably, the synergistic relationship between construction technology and data centres would position Malaysia as a leader in both sectors.
NTT Data, which pioneered the development of the CBJ 1 data centre in Cyberjaya in the early 2000s, now operates six data centres in the region. Following NTT’s lead, other companies, including CSF Advisers, Basis Bay and AIMS Data Centre, have also established a strong presence in Malaysia.
Digital infrastructure has also seen a significant boost, with investments in hyperscale data centres such as the KUL2 facility in Cyberjaya and the AI-ready Iskandar Puteri data centre.
These projects support Malaysia’s vision of becoming a leading digital economy in Southeast Asia.
For the first nine months of 2024, the value of contracts awarded for infrastructure projects exceeded RM41 billion, surpassing 2023’s RM36.7 billion.
After a buoyant 2024, the outlook for 2025 is optimistic, supported by the RM50 billion in allocation in Budget 2025 for infrastructure, with the key areas being sustainable urban transport, renewable energy and rural infrastructure upgrades.
The integration of digital technologies, such as artificial intelligence and smart grids will enhance efficiency and productivity in infrastructure development.
With a strong foundation laid in 2024, Malaysia’s infrastructure investment strategy is poised to deliver long-term economic benefits, positioning the nation as a competitive and sustainable player in the Asean region going forward. – Bernama
