Local construction sector gains strength as hyperscaler projects gather pace
CONSTRUCTION activity has maintained a healthy pace in 2026, with the Construction Industry Development Board (CIDB) reporting that main contractor awards reached RM85.4 billion by the end of May. The figure keeps the industry on track to meet Kenanga's full-year projection of RM180 bil in contract awards, although surpassing the RM238.9 bil achieved in 2025 is likely to be challenging. The private sector remained the primary growth driver, contributing about three-quarters of the total contract value, while public sector projects accounted for the remaining 25%. Although the implementation of several large-scale infrastructure developments has progressed more slowly than anticipated, Kenanga continues to maintain a positive outlook on the construction sector this year. The research house believes project visibility is strengthening across both government-led infrastructure works and private developments. A number of high-profile public infrastructure projects are expected to gather momentum in the coming months. These include the remaining civil engineering and systems contracts for the Penang LRT Mutiara Line, alongside new work packages under Phase 2 of the Pan Borneo Highway and the Sabah-Sarawak Link Road. The data centre segment also remains an important catalyst for the industry. Last year alone, six sizeable land deals involving major United States technology...
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