KUALA LUMPUR (Jan 14) — Malaysia’s construction industry is projected to grow at an average rate of around 4% per year from 2026 to 2029, supported by consistent public and private sector investment, according to the latest Construction Market Insights report by global consultancy Linesight.
Growth is expected to be underpinned by continued spending on housing projects, oil and gas supply chains, and digital infrastructure, with strong spillover effects for commercial property in KL, industrial land in Selangor, and emerging office and industrial hubs across the Klang Valley.
Linesight’s Southeast Asia regional director, Scott Halyday, said construction markets across the Asia-Pacific region are entering 2026 in a more stable position after a resilient performance in 2025. He highlighted Southeast Asia as the region’s key growth engine.
According to Halyday, sustained expansion and greater market balance are likely to define the construction landscape in 2026, although developers and contractors will still need to manage challenges arising from global trade tensions, tariff-related uncertainties, labour constraints, and cost pressures.
In Malaysia, investment in data centres and digital infrastructure is expected to remain a major catalyst for construction activity. This trend continues to support demand for industrial property in Subang area, purpose-built facilities, and factory developments in Puchong, where connectivity and power availability are critical.
At the same time, residential construction and energy-related projects tied to oil and gas supply chains are reinforcing the outlook for supporting infrastructure and mixed-use developments, particularly in established urban corridors and growth nodes around Kuala Lumpur.
Halyday emphasised that collaboration across the project lifecycle will be increasingly important in 2026, especially as labour availability remains constrained.
He noted that early engagement between designers, contractors, and supply chain partners can accelerate decision-making, improve cost and schedule visibility, and optimise manpower planning. Projects that align stakeholders early are better positioned to secure skilled labour, manage risk, and deliver with greater certainty — a key consideration for large-scale commercial property in KL and office space in Bukit Jalil.
Across the wider Asia-Pacific region, Linesight expects most construction markets to achieve annual growth of between 3% and 6% from 2026 to 2029, driven by continued investment in renewable energy, transport infrastructure, and digital assets such as data centres and semiconductor facilities.
Within Southeast Asia, Malaysia, Singapore, and India were among the strongest performers in 2025, with estimated growth rates of 8.3%, 5.2%, and 7.1% respectively. Looking ahead, Singapore’s construction sector is forecast to grow at an average of 4.2% annually through 2029, supported by transport projects and potential expansion in data centre capacity.
Japan, by comparison, is expected to record more modest growth of around 1.3% per year, driven mainly by transport infrastructure upgrades, offshore wind developments, and AI-focused data centres.
Despite ongoing risks linked to skilled labour shortages, cost inflation, and supply chain disruptions, Linesight noted that the impact of new tariffs has so far been less severe than initially expected. Commodity prices largely stabilised in 2025, helping to ease cost pressures across the sector.
Overall, the consultancy remains cautiously optimistic about the construction outlook for 2026, with steady growth expected to continue across Asia-Pacific. For Malaysia, this positive trajectory reinforces long-term demand for industrial land in Selangor, office space in Bukit Jalil, factory assets in Puchong, and strategically located commercial property in KL, aligned with the country’s digital and infrastructure-driven growth strategy.
Yao Mu Realty, based in Kuala Lumpur, Malaysia, specializes in industrial real estate for factories and land, delivering professional and efficient solutions.
Posted by Yao Mu Realty Sdn Bhd on 15 Jan 26
Malaysia