Malaysia construction sector hit by oil price surge
Malaysia’s construction sector is facing growing pressure as rising global oil prices linked to Middle East tensions drive up costs and threaten project viability, industry representatives said.
The United Malaysia Contractors Association warned that higher fuel prices are increasing transportation, machinery and raw material costs across the construction supply chain, particularly affecting key inputs such as steel and cement, News.Az reports, citing Reuters.
The surge in expenses has pushed many projects beyond initial budgets, squeezing profit margins as most contracts were signed at fixed prices and did not account for such volatility. Contractors are now being forced to absorb additional costs, leading to mounting financial losses.
Small and medium sized firms are among the hardest hit, with cash flow challenges intensifying due to rising costs and delayed payments. Limited access to financing is further worsening the situation, raising concerns over potential business closures.
The association also cautioned that escalating costs are already disrupting project timelines, with some developments delayed or temporarily halted, posing risks to infrastructure delivery and broader economic activity.
Industry leaders warned that prolonged pressure could result in job losses and wider economic consequences, urging the government to introduce targeted support measures, including fuel subsidies, flexible contract pricing and improved access to financing.
By Faig Mahmudov
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