Latest news with #PenangLRT
The Sun
2 days ago
- Business
- The Sun
Construction sector job growth expected in 2H 2025
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
Barnama
2 days ago
- Business
- Barnama
Construction Sector Set For More Job Flows In 2H 2025
BUSINESS KUALA LUMPUR, Aug 15 (Bernama) -- 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.
Free Malaysia Today
17-07-2025
- Business
- Free Malaysia Today
MRT Corp confirms green light for Penang LRT construction
The first package of the Penang LRT line project, worth RM8.31 billion, covers a 24km stretch from Komtar in George Town to the reclaimed Island A, with 19 stations and supporting works. (John Shen Lee pic) PETALING JAYA : MRT Corp has confirmed issuing a notice to proceed (NTP) to SRS Consortium on Tuesday, paving the way for full-scale construction of the Penang LRT project to begin. In a statement today, the company said the NTP was issued after the consortium fulfilled all of the key contractual conditions, with the civil works package officially taking effect on June 23. It said preliminary soil testing and environmental checks were ongoing, with advanced works like piling and utility relocation slated to begin in August. Major construction is expected to commence in late 2026. MRT Corp also announced the appointment of MMSB Consult Sdn Bhd as the project's independent consultant engineer, tasked with reviewing each phase of the project, from design to operations, to ensure compliance with safety and regulatory standards. 'The scope of work includes a thorough review of the design, construction, testing and commissioning, and operation and maintenance phases, ensuring adherence to all relevant project requirements, standards and regulations,' it said. The RM8.31 billion contract was awarded in January, but work was delayed until MRT Corp gave the go-ahead in the form of the NTP. The project covers a 24km stretch from Komtar in George Town to Island A in the Penang South Island project, with 19 stations and supporting works. The federal government took over the LRT project through MRT Corp from the Penang government in March last year. SRS Consortium includes Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd, each holding a 20% stake. MRT Corp, a unit of the finance ministry, is the asset owner and project manager. Two more packages remain. The second, a 5.5km cross-strait segment, is now out for tender. The third, a turnkey systems contract, closes for bids on Aug 11. The Mutiara Line will span 29.5km overall with 21 stations, linking a reclaimed island near the airport to Komtar and onward via a cross-channel bridge to Butterworth. MRT Corp has pegged the full cost at RM13 billion, with completion targeted by 2031.
BusinessToday
11-07-2025
- Business
- BusinessToday
Malaysia's Construction Sector Remains Resilient Amid Trade Tensions And Cost Shifts
Southeast Asia's construction sector is demonstrating robust resilience and adaptability despite prevailing global economic headwinds and geopolitical uncertainties, according to the latest Global Construction Market Intelligence (GCMI) report 2025 released by Turner & Townsend, a global professional services company. The report, which provides an in-depth analysis of construction costs across 99 markets worldwide, highlights Southeast Asia's increasing competitiveness added that while construction costs are rising in certain areas, the region is experiencing a significant surge in demand for critical infrastructure, particularly data centres, alongside a strong shift towards sustainable building practices. These combined factors are positioning Southeast Asia as an increasingly attractive destination for global investment in the built environment. Brian Shuptrine, Asia Managing Director at Turner & Townsend, commented on the findings: 'We are seeing dynamic trends across Southeast Asia, where markets are not merely navigating global economic headwinds but actively seizing opportunities for growth through recalibration of costs and demand. The region's commitment to digital transformation and sustainability, and the strategic advantages of nearshoring, are fundamentally reshaping the construction landscape. This translates into significant opportunities for clients investing in future-proof assets, particularly within the rapidly expanding data centre developments and advanced manufacturing sectors.' The report stated that the Malaysian construction sector is poised for continued growth, propelled by public infrastructure projects like the MRT3 Circle Line and Penang LRT, as well as robust private sector demand for digital infrastructure, notably data centres. While Kuala Lumpur maintains relatively low costs at US$1,354 per m², the recent expansion of the Sales and Service Tax (SST) to cover most construction work services (excluding residential buildings) introduces new cost pressures. The industry is responding by embracing digital solutions and collaborative models to protect profitability and increase competitiveness, with a gradual shift towards greener building practices like reducing embodied carbon. As for Singapore, the sector remains one of Southeast Asia's most expensive markets, with average construction costs at US$3,104 per m². Despite anticipated inflation of 3.0% in 2025 and 5.0% in 2026, construction activity remains strong, with contract awards in the first four months of 2025 up approximately 60% compared to the same period in 2024. Challenges persist with tight contractor capacity, skilled labour shortages (especially in MEP trades), and rising waste management costs, driving interest in collaborative contracting models. Meanwhile, Jakarta offers one of the region's most cost-competitive construction markets in Indonesia at US$943 per m², with a steady escalation of 3.0%. The market is gaining gradual momentum, primarily driven by strong activity in the data centre sector as Indonesia's digital economy expands. Local developers are increasingly securing large-scale data centre projects, showcasing growing in-country capabilities. However, reliance on high-quality imported materials for major projects can strain budgets. Regional Challenges and Opportunities: A significant concern across Southeast Asia is the persistent shortage of skilled labour, particularly in Mechanical, Electrical, and Plumbing (MEP) trades, affecting 90.9% of Asian markets, including Singapore, Malaysia, Indonesia, and Vietnam. This underscores the urgent need for investment in training and local workforce development to meet surging demand for green-collar professionals. Sumit Mukherjee, Managing Director of Southeast Asia and Head of Real Estate of Asia at Turner & Townsend, emphasized that while cost remains critical, the focus is increasingly shifting towards value, efficiency, and supply chain resilience. 'The abundance of materials, especially from China, offers opportunities for faster and more cost-effective project delivery in some markets,' Mukherjee stated. The report further indicates that data centers have overtaken industrial, manufacturing, and distribution as the top-performing construction sector in Southeast Asia, reflecting the soaring demand for digital infrastructure. Corporate occupier activity has also rebounded, with a modest uptick in hospitality, sports, and leisure developments as tourism recovers. Looking ahead, nearshoring trends and the escalating demand for advanced manufacturing facilities are key drivers of heightened construction activity. Markets like Vietnam and Malaysia could benefit from a potential redirection of surplus Chinese material supplies if reciprocal tariffs with the U.S. persist, which could accelerate delivery, manage costs, and boost local manufacturing capacity. However, Malaysia's recent trade policy changes, including anti-dumping duties, introduce some uncertainty regarding future costs and supply chain decisions. Turner & Townsend advises clients to prioritise upskilling domestic workforces and strengthening local supply chains to mitigate risks, improve cost control, and ensure successful project delivery in the region's dynamic and growing construction landscape. Related
Focus Malaysia
11-07-2025
- Business
- Focus Malaysia
Big Three builders set to dominate DC jobs as cost pressures shift demand to Malaysia
THE KLCON index waded through a volatile first half (1H). Despite the sell-down, the sector staged a strong recovery rally of 29% from the bottom. 'We attribute the resilience to rescinded GPU restriction rules, Big Tech capex reaffirmation, healthy contract awards and good earnings performance in 1Q reporting,' said Hong Leong Investment Bank (HLIB). As at time of writing, year-to-date (YTD) contract awards have amounted to RM28.9 bil translating to a 39.5% growth year-to-year (YoY). Several notable large scale contracts that have anchored awards this year are: (i) Penang LRT Segment 1 to SRS (60% Gamuda) – RM8.3 bil (ii) KSSC redevelopment to MRCB – RM2.94 bil (iii) LRT3 VO to MRCB – RM2.47 bil. In 1H25 total DC related contracts awarded came in at RM3.3bn (-31% YoY), a slower pace when compared to a frenetic pace achieved in 1H24. Nevertheless, we attribute the temporary slow-down in 1H to timing considering that multiple hyperscale DC tenders were called during this time. Rather than seeing the impact to DC pipeline from GPU related uncertainties, from what we gather tariff induced construction costs inflation in US (CBRE: 3-5% inflation for commercial projects) led to slight reprioritisation of DC pipeline towards cheaper countries including MY. DCs aside, 2H could see more action coming from Penang LRT (subcontracts and systems package) while sizable EM road projects such as SSLR and NCH may materialise. As for the commercial segment (including residential projects sitting on commercial plots), lack of clarity on SST treatment could drag on opportunities in 3Q25 as launch plans may see deferral until SST treatment is clearer. As at time of writing, YTD contract awards have amounted to RM28.9 bil translating to a 39.5% growth YoY. Several notable large scale contracts that have anchored awards this year are: (i) Penang LRT Segment 1 to SRS (60% Gamuda) – RM8.3 bil. (ii) KSSC redevelopment to MRCB – RM2.94 bil. (iii) LRT3 VO to MRCB – RM2.47 bil. In 1H25 total DC related contracts awarded came in at RM3.3 bil (-31% YoY), a slower pace when compared to a frenetic pace achieved in 1H24. 'Nevertheless, we attribute the temporary slow-down in 1H to timing considering that multiple hyperscale DC tenders were called during this time,' said HLIB. Rather than seeing the impact to DC pipeline from GPU related uncertainties, from what we gather tariff induced construction costs inflation in US led to slight reprioritisation of DC pipeline towards cheaper countries including MY. DCs aside, 2H could see more action coming from Penang LRT while sizable EM road projects such as SSLR and NCH may materialise. As for the commercial segment, lack of clarity on SST treatment could drag on opportunities in 3Q25 as launch plans may see deferral until SST treatment is clearer. We are foreseeing a DC award cycle in 2H to be driven by multiple award decisions for DC tenders placed in 1HCY25 – this includes five multi-billion RM tenders for one US based hyperscaler. For the DC segment, we take a 'big is better' view anticipating further inroads to be made by sector's big three (Gamuda, SunCon & IJM) riding on competitive advantages such as balance sheet strength, track record (safety & execution) and integrated structure. Recent news reports of potential AI chip curb on Malaysia is concerning but remains unconfirmed, lacking actionable details. In our view, Malaysian contractors are reliant on US/Western hyperscaler names for sizable DC jobs thus mitigating uncertainties to a certain extent – to this end exemptions might be possible and remains our base case. Recent removal of SST exemption for the construction sector (from 0% to 6%) should in general be a manageable development considering most forms of contracts provide for additional costs increase as a result of changes in law (SST revision qualifies under this). Meanwhile, the continued exemption for government & residential projects will narrow range of exposed projects mainly to non-residential construction projects (28% of construction work value in 2024). Nevertheless, these projects are adequately covered by contract. Recent removal of SST exemption for the construction sector (from 0% to 6%) should in general be a manageable development considering most forms of contracts provide for additional costs increase as a result of changes in law (SST revision qualifies under this). Meanwhile, the continued exemption for government & residential projects will narrow range of exposed projects mainly to non-residential construction projects (28% of construction work value in 2024). Nevertheless, these projects are adequately covered by contract clauses, in our view. We see limited impact on DC segment considering FIDIC style contracts while insatiable demand for capacity could mitigate impact of higher build costs. We retain our OVERWEIGHT sector call anticipating sustained contract flows in 2H anchored by DCs, infra rollout and still buoyant private sector sentiments. In our view, contractors broadly can still add to orderbook from the DC segment as well as infra projects. Valuations at current levels still provide room for upside. —July 11, 2025 Main image: Linkedin
