Kuala lumpur:<Text>

Malaysia's construction sector is expected to maintain a steady flow of contracts in 2026, marking the beginning of the 13th Malaysia Plan (2026-2030), which allocates RM81 billion for development projects, a slight increase from RM80 billion in 2025.

According to BERNAMA News Agency, RHB Investment Bank Bhd (RHB IB) anticipates that 2026 will be a significant year for execution, as contracts secured in the previous year will begin to translate into earnings for contractors. Data from the Construction Industry Development Board (CIDB) revealed that the value of contracts awarded in 2025 declined to RM202.5 billion from RM231.6 billion in 2024, representing a 12.6 percent decrease year-on-year.

The research house stated that this decline should not be seen as a major concern, given that 2024 was a peak year with the highest contract value awarded since the record RM241 billion in 2016. It further explained that government contract values fe ll by 22.5 percent year-on-year in 2025, while private-sector contracts experienced a smaller decline of nine percent over the same period.

The decrease in infrastructure job awards was more pronounced, dropping 44 percent year-on-year to RM24 billion from RM44 billion, primarily due to a 22 percent reduction in government contract awards, as infrastructure projects are largely public-sector driven. Despite this, RHB IB expects several infrastructure projects to be initiated this year, including the systems package and Segment 2 of the Penang Light Rail Transit, the Perak-Penang water transfer project, and the Johor Bahru Elevated Autonomous Rapid Transit.

RHB IB highlighted the potential debut of Mass Rapid Transit 3 awards in late 2026, although they expect this to more likely occur in 2027 following the land acquisition process. The research house remains optimistic about the sector, maintaining an overweight call with top picks such as Gamuda Bhd, Sunway Construction Gr oup Bhd, and Kerjaya Prospek Group Bhd, setting target prices at RM7.00, RM3.45, and RM7.32, respectively.