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Friday, July 4, 2008

Revise construction industry growth forecast, Govt told

KUALA LUMPUR: Growth of the construction industry as forecast in the mid-term review of the Ninth Malaysia Plan (9MP) should be revised in view of rising raw material prices, said Master Builders Association Malaysia (MBAM) president Ng Kee Leen.

“We feel that growth within the construction sector should be revised a bit lower, consistent with Bank Negara's revised gross domestic product growth forecast,” Ng told a press conference yesterday.

According to the mid-term review report, the construction sector is expected to grow at 5.8% per annum, underpinned by activities within the civil engineering, residential and commercial property sub-sectors.

The construction sector grew 4.6% last year compared with 0.5% in 2006. It contracted by 1.6% in 2005 and 1.9% in 2004.

Ng believes the construction sector would record positive growth in 2008.

However, the hike in prices, especially for steel and cement, was hampering the industry's growth, he said.

“Since the oil price hike, many construction projects have slowed down,” he said, adding that the deferment of Penang's outer ring road and monorail projects would definitely affect growth.

MBAM executive director Chan Fook Cheong said the slowdown was imminent despite the Government's decision to pump in RM30bil for development expenditure under the 9MP due to the rise in construction material costs.

“We welcome the move by the Government, but we feel it is more important for the Government to address the uncontrolled increase in prices of building materials,” he said.

Chan noted that if the Government did not look into the matter soon, many construction projects would come to a standstill.

“We have approached the Government (to address the issue) but the reaction has not been encouraging,” he said.

On another note, MBAM, the Chartered Institute of Building Malaysia and Universiti Teknologi Mara will jointly organise the International Construction Conference 2008 at the Kuala Lumpur Convention Centre from Aug 27 to 29.

Ng said the conference would bring together construction players from around the world to address issues affecting the industry and discuss good management practices.

By The Star

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