INDUSTRY ESTIMATION

The construction industry has endured lacklustre financial performance over the past five years. While GDP grew at an average rate of 5.45% from 2000 to 2007, the construction industry stagnated, recording an average growth of 0.7% over the same period. Output for the construction sector hovered around the RM 7 billion mark, but steadily shrank as a share of GDP1, from 3.3% in 2000 to 2.5% in 2007 (refer to Table 1.1).

Table 1.1: Malaysian Construction Industry and the Economy

Source: Economic Reports 2003/04, 2004/05 and 2005/06, Ministry of Finance, Bank Negara Annual Report 2006

Note: The GDP figure is net of imputed bank services charges and import duties



Figure 1.2: Construction output and GDP, 1965 – 2003 (Data for 1965 – 1991 in 1978 constant price; data for 1992 onwards in 1987 constant prices)
Data source: Economic Reports-various issues

Figure 1.2 shows that construction output grew from RM801 million in 1965 to RM 7.58 billion in 2003. The GDP grew from RM17,582 million in 1965 to RM238.4 billion in 2003. This reflects the industry’s important role in providing the infrastructure to satisfy development needs and facilitate investment in other economic sectors.