Data Centers, Infrastructure to Support Construction Sector Growth

Malaysia's construction sector is poised for continued healthy growth through the second half of 2026, bolstered by a dual focus on public infrastructure and the burgeoning data center market. MBSB Research anticipates moderate year-on-year expansion, with non-residential buildings and specialized construction activities, such as data center structural work and mechanical, electrical, and plumbing (MEP) installations, driving the trend.

Data from the Construction Industry Development Board (CIDB) reveals a robust pipeline of awarded projects. In the first seven months of 2026, 9,539 projects valued at RM131.3 billion were awarded, already accounting for 54.3% of the total value awarded in 2025. This indicates a strong and sustained level of activity within the sector.

The infrastructure segment is also showing improved momentum. The Penang LRT's Mutiara Line turnkey system contract, worth RM3.03 billion, has been awarded to a joint venture, while the CMC1 civil works package, led by Gamuda, is progressing ahead of schedule. The data center construction segment has hit a record RM9.72 billion in awards during the first eight months of 2026, surpassing the RM9.26 billion awarded throughout all of 2025 and showing a significant increase from RM6.90 billion in 2024.

Sunway Construction Group Bhd (SunCon) leads the pack in data center awards, securing 47% of the total, followed by Gamuda (35%) and IJM Corporation Bhd (7%). The average contract size is also growing, with recent awards including a RM1.02 billion MEP package for SunCon and a RM1.71 billion data center project for Gamuda. This trend highlights the increasing scale of large-scale data center developments.

Looking ahead, the sector is expected to benefit from the implementation of key infrastructure projects under the 13th Malaysia Plan (RMK-13). An estimated RM12 billion to RM14 billion in public infrastructure projects are in the award pipeline, including the CMC2 package for the Penang LRT (RM4 billion to RM5 billion) and the Langat 2 Fasa 2 water treatment project (RM3 billion to RM4 billion).