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“Malaysia is reviewing contractor proposals to manage rising construction material costs as prices increase by up to 40% amid global supply and logistics pressures.”
Kuala Lumpur, 8th April 2026, 4.00pm – The federal government is currently evaluating proposals from industry stakeholders to address rising construction material costs following geopolitical tensions in West Asia, according to Deputy Works Minister Datuk Seri Ahmad Maslan.
He said the Works Ministry recently engaged with contractor associations to better understand the challenges faced by the construction sector, particularly the impact of escalating material prices on project delivery.
Rising logistics costs driving material price increases
Ahmad noted that while the supply of construction materials remains stable, rising transportation and logistics costs have contributed significantly to the price increases.
“We have gathered feedback from industry players and will carefully review the recommendations submitted. The matter also involves coordination with the Ministry of Finance and the Ministry of Economy,” he said after a working visit to the Construction Industry Development Board (CIDB) Sarawak office on Wednesday.
Contractors propose mitigation measures
Among the measures proposed by contractor groups are:
- Extension of project completion timelines (EOT)
- Price stabilisation mechanisms for key building materials
- Targeted diesel subsidies for selected construction projects
These proposals aim to cushion the financial pressure faced by contractors and developers amid cost volatility.
Material costs reportedly up to 40%
According to Ahmad, industry estimates of cost increases vary, with some contractor associations reporting price hikes of about 30%, while others indicate increases of up to 40% for certain materials.
To obtain a more accurate assessment, the government will rely on official data from the Department of Statistics Malaysia (DOSM).
“We will refer to verified statistics to determine the actual magnitude of the cost increases before making any policy decisions,” he said.
Impact on construction and property sector
The rising cost environment continues to pose challenges for Malaysia’s construction and property development sectors, particularly in managing project budgets and maintaining housing affordability.
Industry observers note that sustained cost pressures could affect new project launches, pricing strategies, and overall construction sector margins if mitigation measures are not introduced.
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