The construction sector is expected to turn around with a positive
growth of 0.7 percent this year, after being in the negative horizon for two
years, in gradual implementation of the Ninth Malaysia Plan (9MP) projects.
The sector registered a negative growth of 1.1 percent in the first
half, which was a slight improvement from last year’s negative growth of 2.2
percent.
The sector may recover on 9 MP and ongoing projects such as Kuala
Lumpur-Putra Jaya Expressway, Duta-Ulu Kelang Expressway as well as upgrading
work at the Kota Kinabalu International Airport.
Implementation of 9MP’s 880 infrastructure deals worth some RM15
billions will start in the fourth quarter.
There may also be higher investment in oil and gas, communications and
utilities.
Some companies have also ventured abroad due to shrinking sales at home.
They are working on 48 projects worth RM15.3 billions had already been
completed, according to Construction Industry Development Board.
Within Malaysia, demand had slowed down for residential homes, partly
due to concern over further interest rate hikes.
There were not much building activities as well because of rising costs
of building materials and transportation.
Still, properties at prime locations enjoyed strong growth with support
from local and foreign buyers.
In the second quarter of 2006, the Malaysian Annual House Price Index
edged up 1.4 percent to RM 163,559.
Houses for the low-income group were not enough because private
developers focused on higher margin properties.
Construction of offices dropped 16.6 percent but retail space rose 1.4
percent.
Eight new shopping malls were completed in the period.
Occupancy rate for offices was 84.2 percent while retail space was 80.1
percent.
Five new hotels were also built in the first half, bringing the total of
hotels in the country to 2,134.
Despite the presence of new hotels and higher room rates since January
2005, average occupancy rate of three to five star hotels sustained at 58.4
percent, spurred by higher tourist arrivals, more international meetings,
conferences, exhibitions and festive activities.
