Malaysia's Construction Sector Shows Strong Growth Amid Digital Infrastructure Push

KUALA LUMPUR — Malaysia's construction sector has demonstrated resilience and growth, with the value of work completed rising by 8.8% year-on-year to RM47.8 billion (approximately USD 10.5 billion) in the second quarter of 2026. This follows an 8.5% increase in the first quarter, according to the Department of Statistics Malaysia (DOSM).

The growth was primarily driven by substantial expansions in the special trade activities and non-residential building sub-sectors, which reported double-digit growth rates of 17.6% and 13.3%, respectively. The residential building sector also saw an increase of 8.7%, while civil engineering grew by 2.7%.

Notably, the civil engineering sub-sector contributed RM16.7 billion (about USD 3.7 billion), accounting for 35% of the total work value. This performance was supported by utility projects worth RM8.1 billion and infrastructure projects such as roads and railways totaling RM6.9 billion.

Private sector investment remained a key driver, contributing RM31.4 billion (65.8% of total work done) and sustaining a double-digit growth momentum of 11.4%. This growth was particularly strong in special trade activities, which grew by 20.2%, and non-residential buildings, which increased by 18.2%. In contrast, public sector contributions rose by 4.1% to RM16.4 billion, supported by the special trade activity sub-sector.

The ongoing digital transformation in the construction sector is also noteworthy. According to industry experts, investments in data centers and digital infrastructure are expected to further bolster the sector's prospects. A recent report highlighted that the development of data centers is crucial for supporting the growth of the construction industry, as it aligns with Malaysia's broader digital economy goals.

Industry analysts noted that the establishment of data centers is about creating a robust ecosystem that supports various industries, including construction, which will help in streamlining operations and improving efficiency across the board.

Geographically, the majority of construction activity is concentrated in states like Selangor, Johor, and the Federal Territories, which together accounted for nearly 65.8% of the total work done. Selangor alone contributed RM12.2 billion (approximately USD 2.7 billion), with significant input from both non-residential and residential building projects.

The positive trajectory of the Malaysian construction sector is supported by ongoing investments in infrastructure and digital capabilities.