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- In Malaysia, ongoing investments in data centres and digital infrastructure are expected to remain a key growth driver, alongside demand from residential development and energy-related supply chains.
KUALA LUMPUR (Jan 14): Malaysia’s construction industry is expected to expand at an average annual rate of 4% between 2026 and 2029, supported by sustained public and private investment in housing, oil and gas supply chains, and digital infrastructure, according to the latest Construction Market Insights report by Linesight.
Linesight regional director for Southeast Asia, Scott Halyday, said construction markets across Asia-Pacific (Apac) are entering 2026 in a more balanced position following resilient performance in 2025, with Southeast Asia continuing to lead regional growth.
“Apac construction markets have emerged strongly, with resilient performance in 2025. Sustained growth and stability are projected to be defining themes for the region’s construction industry in 2026, with Southeast Asian markets leading the pack,” he said.
However, “global trade tensions and tariff pressures alongside labour and cost challenges will still remain front of mind for contractors and developers.”
In Malaysia, ongoing investments in data centres and digital infrastructure are expected to remain a key growth driver, alongside demand from residential development and energy-related supply chains.
Across the broader Apac region, Linesight expects most construction markets to record annual growth of between 3% and 6% from 2026 to 2029, driven by continued investment in renewable energy, transport infrastructure, and digital assets such as data centres and semiconductor facilities.
Halyday said collaboration will be critical in navigating project risks and managing constrained labour resources in 2026. “Speed and certainty will be driven by collaboration. Early engagement with designers, contractors and the supply chain will enable faster decisions, clearer cost and schedule visibility, and more effective planning of constrained labour resources,” he said, adding that projects which align stakeholders early are better positioned to secure talent, mitigate resourcing risk and deliver with confidence.
Within Southeast Asia, Singapore, Malaysia and India were standout performers in 2025, with estimated expansion rates of 5.2%, 8.3% and 7.1% respectively. Singapore’s construction sector is forecast to grow at an average annual rate of 4.2% between 2026 and 2029, supported by transport infrastructure investment and potential additional data-centre capacity.
Elsewhere, Japan is expected to maintain more modest growth of around 1.3% annually from 2026 to 2029, underpinned by investments in transport infrastructure, offshore wind projects and artificial intelligence (AI)-focused data centres.
Despite ongoing risks from skilled labour shortages, cost pressures and supply chain disruptions, Linesight said the impact of new tariffs has so far been more limited than initially anticipated, with commodity prices broadly moderating in 2025. Overall, the consultancy said the construction outlook for Apac in 2026 remains broadly optimistic.
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