KUALA LUMPUR: Malaysia's construction activity rises forfifth straight quarter but the pace has slowed in the second quarter of 2023.
The sector posted an increase of 8.1 per cent year-on-year in value of work done to RM32.4 billion for the period of April-June, data from the Department of Statistics Malaysia (DOSM) rerevealed.
MIDF Research said the construction output based on the value of work done recorded fifth straight quarter of growth in the 2QC2023, albeit moderating to 8.1 per cent yoy (1Q2023: +9.4 per cent yoy).
By type, the growth was mainly attributable to the increase in work done in the residential sector, which rebounded and expanded 6.9 per cent yoy (1Q2023: -2.2
per cent yoy), and faster rise in special trade activities (2QCY23: +9.8 per cent yoy; 1Q2923: +9.0 per cent yoy).
However, civil engineering - which accounted for the largest proportion of the sector's output at 37.4 per cent - grew slower at 10.4 per cent yoy (1QCY23: 17.2 per cent yoy).
The growth was the slowest in four quarters mainly because of the higher base due to the value of work done was more or less the same, hovering around RM12.1 billion in the three quarters to 2Q2923.
Non-residential construction activity sustained positive growth since 1Q2022 although growth wise moderating to five-quarter low of 5.7 per cent yoy (1Q2923: +9.6 per cent yoy).
By project owners, private sector output, which accounted 63.1% of total output, rose faster by 17.3 per cent yoy (1Q2923: +10.6 per cent yoy), while the progress of construction project developments under the government recorded zero yoy growth (1Q2023: +6.1 per cent yoy) or unchanged from 1Q last year.
On the other hand, public corporations ended three quarters of expansion as output plunged by 9.8 per cent yoy (1Q2923: +9.2 per cent yoy).
MIDF Research said compared to previous quarter, the value of construction work done rose 0.4 per cent qoq (1Q2023: +0.8 per cent qoq).
The continued growth in private sector development was offset by lower progress in government projects.
"We believe the government scrutiny on the existing projects may be the factor for the sequential slowdown in government development projects, especially in non-residential and civil engineering sub-sectors.
"Given the moderate growth in construction and services sectors as well as weaker IPI, we opine this will translate into more moderate growth in 2Q2023."
MIDF Research expects the construction industry to continue to report positive growth backed by pick-up in government projects and continued expansion in private sector output.
