Property and Construction

Construction Sector Outlook Remains Positive Despite Cost Pressures

Analysts maintain positive view on construction sector, citing strong orderbooks, government infrastructure rollout, and manageable margin impacts from rising costs.

By Kazi Mahmood · April 8, 2026 · 1 min read

The construction sector outlook remains positive despite near-term cost pressures, with sensitivity analysis showing manageable margin impacts of 2–5 percentage points. Rising transportation costs are the main driver of building material price hikes, though contractual structures provide varying degrees of protection.

Construction

Cost-plus contracts allow full pass-through, while fixed-price contracts include variation-of-price clauses. Strong orderbooks continue to anchor earnings visibility, supported by government infrastructure projects under the 13th Malaysia Plan and Budget 2026. Mega infrastructure and data centre developments are expected to underpin growth. Top picks include Gamuda (TP: RM5.60), SunCon (TP: RM7.30), and MCement (TP: RM10.00).