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Malaysia‘s construction industry record a $6b losses in first three lockdown phases this year

The first and second phases of the movement control order led to RM11.6 billion in industry losses.

Malaysia’s construction industry suffered RM18.5 billion (S$6.03 billion) in losses during the first three phases of the country’s lockdowns to curb the spread of the coronavirus, Works Minister Fadillah Yusof said on Tuesday (Sep 22).

The first and second phases of the movement control order (MCO)between march 18 and April 14 led to RM11.6 billion in industry losses.

The Works Minister said RM6.9 billion in losses were recorded between April 15 and April 28 in the third phase of the MCO which saw the gradual reopening of 13 sub-sectors.

The first three phases of the MCO lasted for 47 days.

“The most severe impact was caused by financial issues, project deliveries and workforce limitations,” Datuk Seri Fadillah said in a speech to industry players.

Under the first three phases, all work were ordered to stop unless they were deemed essential services like medicine shops and medical facilities and supermarkets. Restaurants could only do takeout orders.

All construction works from railway projects to home renovations stopped.

With the disease seen as being under control in Malaysia, the country from May 4 reopened some sectors of the economy under the so-called Conditional MCO, and relaxed controls on some social functions from June 10 under the Recovery MCO.

Mr Fadillah said inspections on 7,590 construction sites nationwide by the Construction Industry Development Board (CIDB) from April 20 to Sept 20 found that 1.96 per cent had not resumed operation.

He said 149 sites were still temporarily closed, with 45 of them facing financial issues, among other reasons.

According to Mr Fadillah, some leeway or special considerations were given by banks to developers affected by the Covid-19 pandemic.

He also said that 89,708 or 88.7 per cent of all construction companies registered with CIDB were class G1 to G5, or categorised as small and medium enterprises.

Many had a high dependence on foreign labour with 438,264 workers, and there was low adoption of technology.

“There has also been a failure to obtain funding from financial institutions for projects affected by Covid-19,” he said.

Mr Fadillah, together with Minister in the Prime Minister’s Department (Economic Affairs) Mustapa Mohamed, had an engagement session on Tuesday with industry players from the construction sector, to get feedback on the impact of the pandemic.

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