Malaysia Construction Industry to Grow 4.3% in 2026 After 11.4% in 2025

Investments in manufacturing, data centers, and transport infrastructure drive growth

Published on Feb. 23, 2026

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The Malaysian construction industry is expected to grow by 11.4% in 2025 and 4.3% in 2026, supported by increasing investments in manufacturing, data centers, and transport infrastructure projects. Growth will be bolstered by sectors like transport, energy, and industrial construction, with smart factory upgrades and rural road development enhancing prospects.

Why it matters

The construction industry is a key driver of Malaysia's economic growth, and the government's plans to invest in manufacturing, data centers, and transport infrastructure are expected to provide significant opportunities for the sector. The industry's performance is closely tied to the country's overall economic performance and government policies.

The details

According to the report, the total value of residential construction work done grew by 11.6% year-on-year in Q3 2025, while that for non-residential buildings and civil engineering works grew by 10% and 8.9%, respectively, during the same period. The Malaysian Investment Development Authority (MIDA) approved 4,874 projects valued at MYR285.2 billion ($64.3 billion) between January-September 2025, an increase of 13.2% compared to the same period in 2024. The construction industry is expected to record an annual average growth of 4% between 2027 and 2029, supported by investments in the industrial, transport and energy sectors.

  • The Malaysian construction industry is expected to grow by 11.4% in 2025.
  • The Malaysian construction industry is expected to grow by 4.3% in 2026.

The players

Department of Statistics Malaysia (DOSM)

The government agency responsible for collecting and publishing statistics on the Malaysian economy, including the construction industry.

Malaysian Investment Development Authority (MIDA)

The government agency responsible for promoting and facilitating foreign and domestic investments in Malaysia, including in the construction sector.

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The takeaway

The Malaysian construction industry is poised for continued growth, driven by government investments in manufacturing, data centers, and transport infrastructure. This highlights the industry's importance to the country's economic development and the government's commitment to supporting the sector.