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KUALA LUMPUR (Jan 16): The construction sector is expected to see robust job flows in 2026, amid healthy contract flows anchored by infrastructure projects and sustained data centre roll-outs, according to Hong Leong Investment Bank Bhd (HLIB).
In a note on Friday, HLIB anticipated that headline job flows will run at a similar pace to 2024-2025, which remains adequate to expand the sector’s order book.
“In our view, the key anchor remains hyperscale data centres where 2026 could see larger campuses begin to take shape—contractors broadly can still add to their order books from the data centre segment as well as infrastructure projects.
“Alongside data centres, we see the water segment as another order book driver in 2026, with multiple large schemes at different stages of roll-outs,” it said, while maintaining its 'overweight' rating on the sector.
Additionally, the investment bank also believes that the Penang Light Rail Transit project should continue to generate more job flows via subcontracts, segment 2 and system works, with the latter two potentially amounting to around RM8 billion.
“Separately, 2026 should see a continued build-up of the Johor-Singapore Special Economic Zone supported by Budget 2026’s RM3.4 billion infrastructure development fund, and we expect further progress on the proposed Johor Bahru Elevated Autonomous Rapid Transit (E-ART) system.
“Finally, MRT3 (Mass Rapid Transit Line 3) is not expected to be a material award driver in 2026 as land acquisition likely occupies most of the year—as such, meaningful tender reactivation and awards are more likely to be pushed beyond 2026,” according to HLIB.
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