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General information about Malaysia
Malaysia is centrally located within the ASEAN and consists of the Malaysian Peninsula and the States of Sabah and Sarawak on the island of Borneo. The former British colony gained its independence in 1957 and is a Parliamentary democracy with constitutional monarch since. Malaysia has a tropical climate and is with a total area of 330.000 km2 slightly smaller than Germany. Due to its bio-diverse range of flora and fauna, Malaysia is one of the 17 megadiverse countries. Malaysia is a multi-ethnic, multicultural and multilingual society with 28.31 million inhabitants. Malays make up the majority of the population at 50.4% followed by Chinese 23.7%, Indian 7.1% and other local Malays 11%. The Malaysian constitution guarantees freedom of religion, although Islam is the largest and official religion. Approximately 60.4% of the population practiced Islam, 19.2% Buddhism, 9.1% Christianity, 6.3% Hinduism, and 2.6% practice Confucianism and other traditional Chinese religions. The official language of Malaysia is known as Bahasa Malaysia but English as well as Chinese are the business languages.
Malaysia is a dynamic country constantly on the move. From a country dependent on agriculture and primary commodities decades ago, Malaysia has now become an exportdriven economy spurred on by high technology, knowledge-based and capital-intensive industries. Malaysia is one of the 20 largest trading nations worldwide and is ranked 30th out of 125 countries by the “Global Enabling Trade Report 2010”, published by the World Economic Forum as well as the 21th largest exporter among the trading nations worldwide. The country is strategically located in the heart of South East Asia and offers a costcompetitive location for investors intending to set up offshore operations for the
The new Economic Transformation Programme (ETP) by the PEMANDU. the Performance Management & Delivery Unit of the Government from Malaysia.4%. 1 Ringgit (RM) = 100 Sen 1 EURO = 4.000. Within the programme. the objective also known as “Vision 2020” to transform Malaysia into a “high income country” until the year 2020 is to be achieved. electrical engineering 4.5% 2-2.2010) 2007: 639.00 or RM 48. it is planned to increase the Gross National Income (GNI) per capita to US$ 15. it is planned to reach a growth of the service sector from 58 to 65 % and to create 3.commodities: 6.8. Market Watch 2011 – The Construction Sector manufacture of advanced technological products for both regional and international markets. In addition. Economical Key facts Malaysia1 Currency: Exchange rates: GDP (billion RM): GDP . petroleum and products 8. 2008.real growth rate: Inflation rate : Exports: Exports .3 million new jobs. Germany: 2. ETP is developed under the patronage of the Prime Minister.Malaysian-German Chamber of Commerce.1 RM (14. machinery 3.partners 2009: Singapore 14.000. Thailand 5.8%. an annual growth of the GNI of 6 % is necessary.4%. Japan 9.0%. US 11.0%. Therefore. 2009: 674.2 RM.5.2%.12.Chemical products 6. The ETP is anchored on 12 National Key Economic Areas (NKEAs).00. Hong Kong 5. 738.5% Exports . the Malaysian economy is supported by a market-oriented economy and pro-business government policies. China 12.5% .6%.7. To reach this. 1 US$ = 3.7% 1 Source: Germany Trade & Invest 2 .2 billion (2009) electronic 36.3%.6%. has been presented to the public.2%.5 . 2010: 4. natural gas fats & oils 6.7%.4%.4 2009: -1.4 % (2010) $157. which are drivers of economic activities that have the potential to materially contribute to the growth of Malaysia.
Germany: 4. The Construction Industry in General The Malaysian construction industry is generally separated into two areas.0%. raw materials: 3.805RM. Thailand 6.Malaysian-German Chamber of Commerce.2 billion compared to US$ 6. Malaysia’s total trade with Germany recorded a decrease of 22 per cent in 2009.2%.996. The second area is special trade works.0%.9%. food and living animals: 6. skilled worker: 1.845RM. consultant: 1. while imports were valued at EURO 3. Singapore 11. One area is general construction. valued at US$ 5. electrical engineering: 7. iron and steel 3. Japan 12.1%.2%. unskilled workers: 910RM 5.0%. USA 11. Exports to Germany amounted to EURO 3.5%. 3 . senior clerk: 2. non-residential construction and civil engineering construction.6%.4% China 14.234.1%.4%. petroleum and products 7.7 billion in 2008. Malaysia was Germany’s largest trading partner and source of imports. Market Watch 2011 – The Construction Sector Imports: Imports .commodities: $119. chemical products 9.3 billion electronics 29.4 million. In 2010. Germany remained Malaysia’s largest trading partner within the EU and was ranked Malaysia’s 9th largest trading partner.450RM. Among ASEAN countries. Malaysians still highly value and appreciate “Made in Germany” products.1% Population below poverty line: Bilateral Trade: Malaysia & Germany Despite ruled by the British historically.4 million in 2009.2% 3.partners: Unemployment rate: Average wage 2008: Middle management: 6. machinery 8.7% (2009) Imports . which comprises residential construction.650RM.2%.
In order to inject greater dynamism into the construction industry and enable it to be globally competitive. in 2007 the Construction Industry Development Board (CIDB) elaborated and submitted a strategic master plan. carpentry. One of the profound changes to have taken place over the last two decades in the construction industry in Malaysia is the emergence of foreign site operatives as an indispensable component of the labour force. sewerage and sanitary works. tiling and flooring works and glass works. 4 . performance and achievements in the industry. Hence. Although the construction industry contributed only 3% to the Gross Domestic Product in the year 2009. the construction industry could be described as a substantial economic driver for Malaysia. the government has to be aware of proper employer treatment and related issues such as discrimination and violation and take respective actions. Schisms between the foreign nationals and local workers and between the various foreign nationals operate to the employers' advantage in which greater control can be exerted. plumbing. painting works. This board also prices individuals or organizations with the prestigious Malaysian Construction Industry Award (MCIEA) to recognize their contribution. As there seems to be no sign of the dependence on foreign workers attenuating.Malaysian-German Chamber of Commerce. Another purpose of the participation to vie for this award is to provide a platform of healthy competition amongst industry players in the quest for excellence by showcasing best practice in project implementation. it makes up an important part of the Malaysian economy due to the interaction with other industry branches such as the metals processing industry and the mechanical engineering or the tourism sector. refrigeration and air-conditioning works. The CIDB represents a statutory board under the Ministry of Works. future waves of migrant workers can be expected. Taking this into consideration. electrical works. Labour segmentation has prevailed as a consequence of variability in country-specific traits. Market Watch 2011 – The Construction Sector which comprises activities of metal works.
the price 5 . as most government projects are contracted out to local contractors. the Government announced several provisions to allow variation in the contract value of government projects. the construction sector is envisaged to expand 4. It identifies key economic sectors and focuses on stepping up productivity.Malaysian-German Chamber of Commerce. It also reveals that the number of private projects generally exceeds the number of government projects. Underpinned by sustained property demand. Despite the financial turmoil. Especially for foreign contractors the private sector plays an eminent role. the number of overall projects in 2008 reaches a reasonable level. sustainable growth and the creation of a united and just society. The expansion was largely led by increased civil engineering and non-residential activities following the speedy implementation of construction projects under the Ninth Malaysia Plan (9MP) and the stimulus packages. Market Watch 2011 – The Construction Sector Value-added of the construction sector strengthened further by 6.3% during the first half of 2010 (January – June 2009: 2. regardless the status of contractor. The Civil Engineering Activity In the past years the civil engineering sub-sector registered an increase due to higher activity in the oil and gas sector as well as the implementation of some projects of the Ninth Malaysian Plan (9MP) and growth corridors development. particularly for commercial buildings as well as positive business and consumer sentiments.8%). This is to assist contractors to cope with escalating prices of construction materials.9%).9% in 2010 (2009: 5. For the civil engineering works. The table below contrasts local and foreign contractors and compares the number of government projects with private projects respectively. In August 2008. The 9MP represents the second phase of the 10-year Third Outline Perspective Plan (OOP3) and determines whether the economic tools are strong enough to steer the country towards realizing the objectives of Vision 2020 with the aim to achieve the status of a self-sufficient industrialized nation by the year 2020.
313. supported by ongoing construction of commercial properties.52 2.83 70 2.99 2009 6. Market Watch 2011 – The Construction Sector variation is extended from 5 to 11 types of building materials.064.92 2008 6.38 4 3.07 2.702 33.213.729 38.024.851.631.837.964.386 94.346.83 2.416. number and value of projects will be given. Value (RM mil) 2007 7.99 5 4. 5. Table (1): Number and Value of Projects Awarded by Status of Contractors as of December 2011 Project Category Total Number Of Projects Total Project Value (RM mil) Local Contractors Foreign Contractor Government Projects No.416.791 3. Facing the figures of the individual categories. Value (RM mil) No.72 In the following.57 3.806 73.745 44.22 74 3.450.824. Figures are subject to change due to late notification.152.954 44.Dec. Value (RM mil) Private Projects No.22 4.867.91 .794 38.546 16. Construction Industry development Board Malaysia 58.338 43. industrial units and hotels. that projects related to infrastructure and non-residents are very high in number and value. a further look into the type.962 32.27 1.Malaysian-German Chamber of Commerce.350 2010 Notes: Total may not necessarily add up due to rounding.475. particularly condominiums and apartments. Value (RM Mil) Private Projects Government Projects No. Contractors involved in design and build projects will be paid according to price variation of building materials.32 90 2. Construction activity in the residential sub-sector moderated following the completion of several high-end properties.522 85. Construction activity in the non-residential subsector is estimated to increase marginally.214 1 316. Source: CIDB. 6 . followed by projects targeting residents and social amenities. one will detect.99 49 1.859.05 1 1.26 3.
3%).596 1.82 13.380 1.13 72.522 1.39 24. The liberalization of the Foreign Investment Committee ruling on foreign purchases of properties and the promotion of Malaysia My Second Home (MM2H) also led to the expansion of the sub-sector.80 2008 Residential Non Residential Mix Development Social Amenities Infrastructure Others 2009 Residential Non Residential Mix Development Social Amenities Infrastructure Others December 2010 7 .46 26.635.358 1. high-end landed properties located in preferred areas were well-received with 100% take.Malaysian-German Chamber of Commerce. Despite slower housing construction activity.00 15.70 273.652 40 3.114.294.718 1.31 85. the take-up rate of newly launched residential units improved to 19. However.62 97.5% (January-June 2009: 12.862.853 2. financing packages and affordable interest rates.057.22 19.54 153.62 0.10 12.602 Total Project Value (RM mil) 93.933. To conclude. coupled with attractive.878.2% in the second quarter of 2010 compared with the preceding quarter.00 21. In addition.611.422.143 16 1. Table (2): Number and Value of Projects Awarded by Category as of December 2010 Project Category 2007 Residential Non Residential Mix Development Social Amenities Infrastructure Others Total Number of Projects 7. the measure to provide tax relief on interest paid for housing loans will provide some support to demand for houses.097.837. Market Watch 2011 – The Construction Sector In addition.20 16.472 1. housing starts recorded an increase of 3.291 10 1.004.up rate during launches.579 40 6.07 16.282.486 2.737.41 22.858. the performance of the sub-sector in the first half of 2010 was affected by the delay in launching new projects during the economic downturn in 2009 when developers were more cautious.25 38.787 37 6.787.258 1.57 37.75 919. following the economic recovery.14 187.87 23.958 0 1.
4. due to the escalating prices of construction materials and increased inflationary pressures. including Johor Premium Outlet and Lido 8 . With the strong domestic economic performance coupled with the buoyant secondary housing market. In addition. as at the end-August 2010.5%).462. driven primarily by ongoing construction of commercial properties. In line with the Government’s objective to provide affordable houses for the low-and-medium-income groups. while another 12.382. indicating developers were more bullish on the housing market.81 Notes: Total may not necessarily add up due to rounding.222 0 440 923 21 10.9% and 13. a total of 2.1%. Figures are subject to change due to late notification.July 2009: -34.62 11. private projects in the five growth corridors.42 99. On the supply side.988. Similarly.0% (January. Construction Industry Development Board Malaysia However. In addition. particularly in the Klang Valley.00 4.482 low-cost houses for the rural poor and hardcore poor were built. Growth in the non-residential sub-sector increased strongly. potential house buyers. -11.2% (January-August 2009: -9. Penang and Selangor are shifting from a wait-and see attitude in 2009 to ready-to-commit in the second-half of 2010. whereby developers are confident that property prices may increase up to 20% in the second half of 2010.17 11. Market Watch 2011 – The Construction Sector Residential Non Residential Mix Development Social Amenities Infrastructure Others 996 1.144 units are under construction.733 units of Rumah Mesra Rakyat under the Home Ownership for the People (HOPE) project were completed as at the endJune 2010. developers were generally adopting a more cautious stance. particularly purpose-built offices.3%) respectively. loans approved by the banking system for the construction sector rose 52. the number of new sales and advertising permits as well as approvals to build houses increased 15.124. indicating the pick-up in construction activity during the second half of the year.78 0. This was further supported by the findings of a survey undertaken by the Real Estate and Housing Developer’s Association (REDHA) in July 2010.Malaysian-German Chamber of Commerce. Source: CIDB.
817 sm of retail space. on account of steady tourist arrivals.Malaysian-German Chamber of Commerce. Value (RM m) 2010 No . Value (RM m) 2009 No . Value (RM m) 2008 No . During the first half of 2010. shopping complexes under construction increased to 1. especially in the Middle East. Value (RM m) 9 . The projects include construction of highways.48 million sm (end. with the average occupancy rate at 81. Market Watch 2011 – The Construction Sector Boulevard in Iskandar Malaysia as well as Kota Kinabalu City Waterfront and South China Place in Sabah Development Corridor contributed to the sub-sector. Table (3): Number and Value of Projects Undertaken by Malaysian Contractors in Global Market by Year of Project Awarded 2006 Country No . offering 21. The average occupancy rate of three-to-five star hotels remained at 54. Demand for retail space in shopping complexes remained strong. In addition. 493 sm). Construction of leisure properties improved further in line with the growth of the tourism sector. airport terminals and hydropower plants. in the first half of 2010 (January. The turnaround in the construction sector and the increase of construction companies led to a re-rating of construction companies listed on the Bursa Malaysia.181 square meters (sm) (January-June 2009: 62.June 2009: 1.44 million sm). the completion of 20 new shopping complexes contributed an additional 249. Value (RM m) 2007 No .07 million sm). while the occupancy rate remained high at 84. resulting in the existing stock of retail space increasing to 10. India and Thailand.2%.884 rooms (end-June 2009: 82 hotels.December 2009: 10.4%). reflecting retailer’s confidence in consumer spending. Construction starts involved seven hotels with a total of 589 rooms. Construction of new purpose-built offices expanded significantly to 334. (end. two in Johor as well as one in Kelantan and Sarawak. reflecting strong business sentiment.2%. of which three were in Perak. some domestic construction companies were also augmented by overseas projects. 86 hotels were under construction.June 2009: 81. 21. In addition.110 rooms). As at the end-June 2010.32 million sm as at end-June 2010.0%.
407.69 3.67 9.75 146.50 77.822.149.473.622.00 281.97 581.72 56.61 52.81 4.94 20.130.42 84.74 308.00 194.44 693.394.368.16 185. with the recent onset of ‘green technology’ in Malaysia.84 903. Market Watch 2011 – The Construction Sector ASEAN Brunei Indonesia Philippines Singapore Thailand Vietnam India Middle East Iran Jordan Bahrain Libya Qatar Saudi Arabia Syria United Arab Emirates/Dubai Africa Sudan South Africa Algeria Papua New Guinea Morocco Others Bangladesh Cambodia China Maldives Mongolia Pakistan Sri Lanka Trinidad+Tobago Turkmenistan Yemen United Kingdom Australia Ireland Hong Kong Seychelles Grand Total 13 1 2 10 10 23 1 6 2 6 ` 7 2 1 1 10 1 3 2 1 2 1 55 8 2.20 139.45 623.853.69 60.76 559.74 524. Source: CIDB.82 482.62 1.13 161.00 56.20 1.98 4.92 33.10 90.84 78.00 1. smart building and energy efficient building.65 12.67 314.133.80 0.50 5.22 36.93 111. Figures are subject to change due to late notification.467.593.03 Note: Total may not necessarily add up due to rounding.88 5.40 522.551.63 233.39 450.398.47 51.37 2 1 1 2 18 1 2 5 10 0 4 2 1 1 26 887.00 39.653.00 70.862.92 171.76 382.00 10.41 839. The launch of 10 .83 1.77 5 1 2 2 4 0 0 2 2 11 1.06 136.189.Malaysian-German Chamber of Commerce.17 84.751.31 2.58 18.40 19.179.67 854.00 0 0.28 1.79 924.609.00 11.52 1.33 63.91 1.582.72 9.24 2.47 47.72 1.22 899.65 268.05 16.52 90.30 5.84 3.95 2.93 1.00 581.00 2489.31 932. However.74 120.314.030.00 1.006.00 800. prefabrication practice.88 20 2 3 2 12 1 7 25 1 2 4 2 2 14 0 17 5 4 1 2 1 1 2 1 69 2.491.06 1.00 547.308.666.000. Construction Industry Development Board Malaysia Green Building The Malaysian building construction market is very competitive with local companies taking the lead.92 4.24 7.44 383. more and more foreign participants are involved in the construction sector especially in the development of green buildings particularly in technologies relating to green building.97 404.31 7 2 3 2 1 24 2 1 3 2 16 3 1 2 20 2 3 9 2 1 1 1 1 55 1.27 72.58 1.00 1.01 14.
supported by the civil engineering segment due to the implementation of projects under the economic stimulus packages. The RM20 billion facilitation fund is expected to attract private sector investments worth at least RM200 billion of which a major portion would be investments involving the Construction Sector. Both these allocations will create the impetus in driving demand for the Construction Sector as out of the RM230 billion for development expenditure. understanding its roles and functions in construction firms is a requisite in assessing their performance.7% per annum as compared to 6% per annum GDP growth for the country. Hence. The High-Income Economy will hinge on higher productivity and the engagement of the private sector participation. Outlook The construction sector is expected to expand by 5. 60% or RM138 billion will be expended in physical development to be undertaken by the Construction Sector. which will be the primary driver of growth and innovation. RM230 billion development allocations and RM20 billion facilitation funds have been allowed for under 10thMP. The governments are now on the verge of implementing the 10th Malaysia Plan that will set the stage for a major national structural transformation.2% at the end of 2011. towards that of a HighIncome Economy. 11 . Market Watch 2011 – The Construction Sector ‘Green Building Index’ has put Malaysia on the green roadmap and further development is expected to take place in the coming years. The success of the construction industry is increasingly predicated on technology driven investments in information technology (IT) and this is expected to be even more so in the future. Information Technology (IT) plays a vital role in the sustained growth of a business and is the sine qua non of all businesses today.Malaysian-German Chamber of Commerce. including the construction industry. The Plan which covers the period from 2011 to 2015 will potentially have high impact on the Malaysian Construction Sector where it is expected the Construction Sector will grow at 3.
2 Aluminium Smelters in SCORE Sarawak at RM18 billion. Among these projects are 7 Tolled Highways at an estimated value of RM19 billion. Malaysian Rubber Board’s Land Development at RM10 billion. 2 Coal Electricity Generation Plants at RM7 billion.Malaysian-German Chamber of Commerce. 12 . Petronas LNG Melaka Plant at RM3 billion and. Market Watch 2011 – The Construction Sector In promoting economic growth through Private Sector participation. 52 high-impact projects worth RM63 billion have been identified for implementation under the PublicPrivate Partnerships (PPP) initiatives.
Interior Design & Building Exhibit Exhibition th Date: 30 June – 3 July 2011 Venue: Kuala Lumpur Convention Centre (KLCC) HOMEDEC 2011 Home Decoration Exhibition Date: 29 Apr – 2 May 2011 Venue: Kuala Lumpur Convention Centre (KLCC) Date: 22 – 24 Jul 2011 Venue: Persada Johor International Convention Centre. Judih Yong: judih.Malaysian-German Chambe of Commerce. Our core business is to establish contacts.ahk. Our “Office-In-Office Konzept” and our “Firmenpool Malaysia” will give you a permanent address to Office give develop the market. Materials & Construction Technology Exhibition Date: 22-25 Sept 2011 Venue: PWTC. Market Watch 2011 – The Construction Sector German Chamber Important Malaysian Construction Trade Fairs 2011 20 ARCHIDEX 2011 12 Malaysia Architecture. Please contact us for further information. Thomas Brandt: thomas. project acquisitions. Johor Bahru BUILDTECH 2011 Malaysia International Building Thomas Brandt: Mr. Kuala Lumpur Contact: Mr. 11/17/2011/3:29 PM/JY/MKT/Market Watch Construction 2011 /JY/MKT/Market 13 .ahk.de Ms.email@example.com@malaysia. etc. finding distribution partners.de We hope the market report serves you with actual information on the Malaysian market.
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