AAR 4152 COURSEWORK 1 NUR ULFAH AWATIF UMAIRAH BT ALIAS – 1015568 BACHELOR OF ARCHITECTURE AND ENVIRONMENTAL DESIGN
Construction industry can be catalyst towards Nation’s socio-economic growth and development due to its nature as a derived demand. In the 10th Malaysian plan, around RM230 billion is allocated for construction projects beginning 2011 till 2015.
Discuss how the industry can help to promote socio-economic growth and development especially during the time of current economic crisis.
Nur Ulfah Awatif Umairah bt Alias 1015568
the construction industry has endured lackluster financial performance ( construction industry development board. More than 50 % of the projects by the private sectors are to be realized under the 10th Malaysia plan through privatization. and other community infrastructures). The ministry is also formulating the National Housing Policy.The construction industry stagnated and the output of the construction slightly shrank . over the past five (5) years. hospitals.These factors have enables the growth of other industries through its role as a fundamental building block of Malaysian’s socioeconomic development. government begins to see this issue carefully to enhance the contribution value of the construction industry to Malaysian economy. As the construction industry influences the growth of other industry. “derived demand” is a term in economics where demand for one good or service occurs as a result of demand for another. Financial has always been the key issue. This may occur as the former is a part of production of the second. Unfortunately. In the other hand. Therefore.The economical condition of the construction industry would definitely affect other industries in Malaysia. Construction industry works as the derive demand to Malaysian’s socio-economic development and have been the major contributor to the county economic growth.AAR 4152 COURSEWORK 1 NUR ULFAH AWATIF UMAIRAH BT ALIAS – 1015568 BACHELOR OF ARCHITECTURE AND ENVIRONMENTAL DESIGN
Introduction The construction industry in Malaysia is critical to national wealth creation as it acts as a catalyst for and has a multiplier effects to the economy. the term “Socio economy” defines as the studies looking at both social and economic conditions relevant to wellbeing. government invested and allocate around RM 230 billion for construction projects to move towards inclusive socio-economic.5 growths in growth domestic product (GDP) throughout the 10 MP to create a high income country. 2010). 2007) and has experience global financial crisis in 2008 and 2009 (Chong. One of the objectives of the policy is to ensure that the property sector continues to be a prime mover of the country’s economy. Literally. It is expected that the overall building construction market would be elevated in growth with the expanding 10th Malaysia Plan (2011-2015) as the government expressed their interest in more involvements from the private sector and investors to engage in public projects ( construction and management of schools. in 10th Malaysian plan (2011 to 2015). private funding initiative (PFIs) and Public Private Partnership (PPP) programs as announced by the director of Economic Planning Unit. The government targeted increment of 5.
The 10MP is planned to strengthen the construction industry image through the enhancement of the professionalism of the construction industry. The construction industry has provided job opportunities for approximately 800. it is believe that the construction index will continue to display an upward trend as more projects are likely to be announced in the coming months. repaired. 2010).000 people ( construction industry development board. constructed or produced. and demolished.
The construction industry would first promote socio economic growth and development in the current economic crisis by providing the employment opportunities. procured. Thus. the procure-to-pay strategy and also raise the sophistication level of the construction community. altered. designed. 2007). As the result it leads to economic growth and effect the social expansion.year plan `is market-neutral in the short term. 2010). but positive for the longterm prospects of the construction and property sectors' (Chong. As UOB Kay Hian Research puts it.
.AAR 4152 COURSEWORK 1 NUR ULFAH AWATIF UMAIRAH BT ALIAS – 1015568 BACHELOR OF ARCHITECTURE AND ENVIRONMENTAL DESIGN
Content: The construction industry is a sector of the economy that transforms various resources into constructed physical economic and social infrastructure necessary for socio-economic development. though a long-awaited event. maintained. and environmental. The construction sector is vital to the achievement of national socio-economic development goals by providing employment. (Tanzania Construction industry. shelter and infrastructure ( construction industry development board. the country's latest five. Having outperformed the broader market. After the 10MP. 2007).
The unveiling of the 10th Malaysia Plan (10MP) on June 10. did not have much impact on the local equity market. 2009). there are more than RM4b worth of construction jobs were awarded to the local construction companies to undertake various infrastructure works in both Peninsular and Sarawak (midf research. the construction industry is a fundamental economic activity which permeates most of the sectors of the economy and it has a major role to play in achieving social economic development objectives of any country. It embraces the process by which the said physical infrastructure are planned. It is a part of the long term plan for Malaysian economy which is expected to help contribute in many ways. These will open a wider opportunity for the citizen to strive for the highest standard of quality occupational safety and health.
road design and construction will be upgraded to improve quality and reduce maintenance costs through new technologies and methods such as utilizing soil stabilizers and concrete paving. commercial complex. and tourist attraction are the entire essential element to a functioning economy which are maintained by the construction industry. Most buildings in Malaysia the institutional. Research and construction intellectual studies could be expend with more new innovation in the construction demand (new construction method and material etc).AAR 4152 COURSEWORK 1 NUR ULFAH AWATIF UMAIRAH BT ALIAS – 1015568 BACHELOR OF ARCHITECTURE AND ENVIRONMENTAL DESIGN
Human resource capabilities could be enhanced to benefit the nation which will result a better skill level by master builders in the construction industry. Besides a strategy to train and increase the building capability. According to the 10th Malaysian plan (10MP). financial services and professional services.
. New technology such as the building automation system (BAS). It contributes in its role as a large user of local manufactured goods (building and contraction material). 2010). The opportunity given through the 10MP to construction industry opens a wider possibility for the entrance of new technologies which require experts and specialist in each new system.540 kilometers in Sabah and 2. lighting. the government had allocated RM20 million or $6. 2. The new design will increase road strength to support commercial and heavy vehicles and will enhance connectivity between rural areas and urban economic centers to expedite development of economic sectors in rural areas. benefitting 3.
Further. a total of 6.819 kilometers in Sarawak. it will promote employment and nurture desire of the locals’ work force in the construction industry. With the government's concerted effort to encourage both investors and the public to embrace green technology. the factory could employ more locals and would give space for new researcher to prove their products and expertise. and heating and ventilation system could be implemented in new building composition. specialized tooling and heavy machinery. Indirectly it leads to the globalization with knowledge sharing throughout the world and the need to be updated with the world current construction system and technology which will require the use of communication industry.3 million people nationwide.312 kilometers of paved roads will be constructed in Peninsular Malaysia. The BAS smart buildings are becoming a representative of a huge potential growth in is market supported by the increasing numbers of local BAS suppliers which through construction industry.1 million in its 2010 budget to intensify green-awareness activities and to encourage the practice of environmentally-friendly lifestyle (Melvin Leong. government offices. By the end of the Plan period. the construction industry creates a multiplier effect to other industries including manufacturing.
3 million people nationwide. 2010). By the end of the Plan period. 2010 later continue explaining that:
The growth of non-residential building construction seemed to be able to traverse better than the residential building segment during the economy downtime. Frost & Sullivan finds that the revenue growth of non-residential building construction is higher than residential building construction by 3 to 5 percent annually until 2015. plumbing.AAR 4152 COURSEWORK 1 NUR ULFAH AWATIF UMAIRAH BT ALIAS – 1015568 BACHELOR OF ARCHITECTURE AND ENVIRONMENTAL DESIGN
Generally. catalyzed by socio-economic growths such as tourism.
. a total of 6. carpentry. According to the 10th Malaysian plan (10MP). construction of non-residential and residential buildings contributed between 40 to 55 percent of the total construction market between 2006 and 2009. the construction industry could be partial into two split category. road design and construction will be upgraded to improve quality and reduce maintenance costs through new technologies and methods such as utilizing soil stabilizers and concrete paving. Additionally.312 kilometers of paved roads will be constructed in Peninsular Malaysia. In Malaysia. and healthcare (Melvin Leong.819 kilometers in Sarawak. The first category is the general construction which would include the residential construction.Melvin Leong. housing and public spaces. sewerage and sanitary works. electrical works. benefitting 3.540 kilometers in Sabah and 2. The nonresidential building construction segments are expected to drive the growth of the market in 2010. painting works. There are the expending economic infrastructures (such as the airports. refrigeration and airconditioning works. which comprises activities of metal works. education. non-residential construction and civil engineering construction. tiling and flooring works and glass works. 2. The second area is special trade works. The new design will increase road strength to support commercial and heavy vehicles and will enhance connectivity between rural areas and urban economic centers to expedite development of economic sectors in rural areas. the growth trend of the former segment in recent years of economic volatility suggested that it performed better than the residential building segment.highways and commercial centers) as well as the social infrastructure such as the schools. the general construction and the special trade works.
hotels. it is expected to grow approximately 5 percent. The tax exemption will take part along the 10MP period from 2010 to 2014. However. and recreational projects. It is very convincible that the rise of construction industry is essential to the betterment of the nation’s socio economy as it works well as the derived demand to other industries. before gaining full momentum in 2011 with the aid of the new 10MP. modernization. A step further is taken by the government to the growth of country’s healthcare tourism industry through the provision of tax exemption equivalent to 100 percent qualifying capital expenditure incurred for the first 5 years for the construction of new hospitals or expansion. shopping areas. demand for new commercial and industrial buildings remain sturdy. holiday camps. Under the 10MP.Government have definitely take action for nation’s future as in 10MP. Currently.
Conclusion: building construction market expansion have simply resulted increasement in Malaysian socioeconomic growth as the demographics increases demand for new buildings and refurbishment of existing ones. or refurbishment of existing centers.Construction works in the industry throws open several opportunities to market participants. such expertise in service integration is sorely lacking. the building construction market has gone through a very challenging years. Throughout economic turndown in 2008 and 2009.AAR 4152 COURSEWORK 1 NUR ULFAH AWATIF UMAIRAH BT ALIAS – 1015568 BACHELOR OF ARCHITECTURE AND ENVIRONMENTAL DESIGN
The rise of construction industry in a long term could also benefit the tourism industry.
. Malaysia experiences rapid growth in tourism industry. Government is encouraged to invest on the new construction for tourism facilities such as resorts. while new constructions of institutional buildings such as schools and hospitals are almost consistent with the government's commitment in its education and healthcare policies. The building construction market is expected to improve in 2010 with positive growth.
january).com. (2009. 3. Kuala Lumpur.constructiontransparency. from A midf web site: http://www. (2007). from construction sector transparencyinitiative: http://www. 2010. february 22). 2010.midf.org/CountriesSupporters/Countries/Tanzania/
.pdf Tanzania Construction industry. midf research. (2010). Beneficiaries of the 10MP. Retrieved august friday. Y. Retrieved August 28.AAR 4152 COURSEWORK 1 NUR ULFAH AWATIF UMAIRAH BT ALIAS – 1015568 BACHELOR OF ARCHITECTURE AND ENVIRONMENTAL DESIGN
construction industry development board. Construction Update. Chong. (2010. construction industry master plan.my/project/midf/media/2010/02/22/092131-177.