Malaysia Construction Work Hits RM49.5 Billion in Q3 2026

Malaysia’s construction sector did RM49.5 billion of work in the third quarter of 2026, up 9.0% from a year earlier. That is slightly faster than the 8.8% growth recorded in the second quarter, according to the Department of Statistics Malaysia (DOSM). The bigger story for business owners is where that growth came from: private projects and non-residential buildings, not housing.

The headline numbers

DOSM released its Construction Statistics for the third quarter of 2026 on 12 November 2026. Construction work done reached RM49.5 billion, a 9.0% year on year increase. Compared with the previous quarter, work done rose 3.6%, up from 2.7% quarter on quarter growth in the second quarter.

For the first nine months of 2026, the sector did RM143.9 billion of work, up 8.8% from the same period in 2025. That is slower than the 13.3% growth seen in the first nine months of last year, but it is still solid expansion on a much larger base.

Non-residential buildings are leading the way

Of the four sub-sectors DOSM tracks, non-residential buildings grew fastest at 21.1%, reaching RM15.7 billion. This segment now makes up 31.6% of all construction work done, up from 28.5% a year earlier.

The other sub-sectors grew more slowly:

Civil engineering: RM16.9 billion, up 2.2%. It is still the largest sub-sector with a 34.1% share. Utility projects contributed RM9.4 billion and roads and railways RM5.6 billion.
Residential buildings: RM10.7 billion, up 2.7%, or 21.7% of the total.
Special trade activities: RM6.2 billion, up 13.2%, or 12.6% of the total.

Year to date, special trade work is up 18.3% and non-residential buildings are up 15.8%. These two segments have been the consistent bright spots of 2026.

The private sector is carrying the load

Private sector projects accounted for RM33.3 billion, or 67.2% of all work done, and grew 12.7%. That is faster than the 11.4% private sector growth in the second quarter. Within private projects, non-residential buildings grew 21.8% and special trade work grew 20.9%. Private civil engineering also returned to growth at 8.7%, after contracting 6.8% in the second quarter.

Public sector work grew just 2.2% to RM16.3 billion, slower than 4.1% in the previous quarter. One bright spot: public non-residential building work rebounded to 17.8% growth after an 8.0% decline in the second quarter.

In short, private companies are the ones commissioning most of the new work right now. For suppliers and contractors, that means private developers and corporate clients are the main customers to pursue.

Specialist trades are seeing real demand

Special trade activities are the jobs that happen inside and around a building once the structure is up. DOSM’s breakdown shows RM1.4 billion of electrical installation work, RM1.2 billion of site preparation, and RM1.1 billion of plumbing, heating and air conditioning installation in the quarter.

Many of these trades are run by small and medium enterprises. A 13.2% rise in this segment, on top of 18.3% growth for the year so far, is a strong signal for electrical contractors, mechanical and engineering firms, and the suppliers that serve them.

Four states hold two thirds of the work

Construction activity remains concentrated. Four states accounted for 64.7% of all work done in the quarter:

Selangor: RM11.2 billion (22.7%), including RM4.5 billion of non-residential and RM2.7 billion of residential work.
Johor: RM10.1 billion (20.5%), including RM4.0 billion of non-residential work.
Sarawak: RM5.7 billion (11.4%).
Wilayah Persekutuan (Kuala Lumpur, Putrajaya and Labuan): RM5.0 billion (10.1%).

Selangor and Johor alone did RM21.3 billion of work between them, with non-residential buildings the largest contributor in both.

What this means for your business

Follow the private money. Two thirds of construction work is privately funded and that share is growing faster than public work. Build relationships with private developers, main contractors and corporate facility owners.
Commercial and industrial clients are the growth market. Non-residential building work grew nearly eight times faster than residential in the quarter. If your business depends only on homebuyers, consider whether your products or services can serve commercial and industrial projects too.
Specialist SMEs have an opening. Electrical, plumbing, air conditioning and site preparation work all saw strong demand. Firms with the right certifications and capacity are well placed to win subcontracts.
Location matters. Selangor and Johor are where most of the work is. Suppliers outside these states may find it worth building delivery capacity or partnerships there.
Watch the slowdown in public work. Public sector growth eased to 2.2%. Businesses that rely heavily on government contracts may want to diversify their client base.

Sources

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