KUALA LUMPUR, Dec. 24 (Xinhua) -- Malaysia's construction sector is expected to see stronger earnings visibility heading into 2026, underpinned by resilient private sector demand, robust data center investments and a multi-year public infrastructure pipeline, as contractors continue to benefit from sustained foreign investment flows and improved project execution, according to several research houses.
MBSB Research said that it is positive on Malaysia's construction sector, backed by a resilient private sector demand and stronger public project execution.
According to the research house, data center demand in Malaysia also remains structurally strong, with contractors continuing to secure hyperscale mandates as part of Southeast Asia's ongoing digital infrastructure boom, supported by robust leasing demand, cost competitiveness, and long-term client partnerships.
CGS International is also upbeat on Malaysia's construction sector going into 2026 with expectations of continued foreign direct investment flows from data centers, industrial warehouses and semiconductor factories, some revival in government infrastructure projects and the still benign cost environment.
It opined that data center contract flows will continue to represent order book opportunities for contractors in 2026, noting that Mordor Intelligence has forecasted Malaysia's data center market to reach 13.6 billion U.S. dollars in 2030 (versus 5.5 billion dollars in 2025).
TA Securities also said in its recent report that it expects Malaysia's construction sector to regain momentum in 2026, underpinned by sustained growth in the federal government's development budget allocation, a robust pipeline of large-scale infrastructure projects, and stronger private sector investment supported by an improving property market outlook.
"Additional upside stems from the government's continued emphasis on flood mitigation initiatives and enhanced connectivity projects in East Malaysia, which should provide further earnings visibility for contractors with relevant exposure," said the research house.
However, it remained cautious regarding the potential impact of higher construction material costs arising from the recent ready-mix concrete price hike and the possibility of slower-than-expected new construction job roll-out weighed down by global market uncertainties. (1 ringgit equals 0.25 U.S. dollars) ■
