Data centre jobs keep construction sector outlook upbeat despite mixed quarterly resultsmrt

KUALA LUMPUR (March 12): Malaysia’s construction sector will continue to ride on the ramp-up in private sector jobs, particularly data centre projects, in the coming years, said BIMB Securities.

“Sector fundamentals remain supportive given the sizeable order books accumulated and the anticipated ramp-up in project execution moving into FY2026-FY2027,” BIMB Securities said in a note on Thursday.

The rapid expansion of hyperscale data centres in Malaysia has been a key driver for construction activity, particularly for contractors involved in specialised industrial and digital infrastructure projects.

Other than data centres, the research house said rail and highway developments, as well as water infrastructure projects are also expected to pick up in the near term.

The research house maintained its 'overweight' call on the sector following the latest batch of quarterly results, noting that contractors with exposure to hyperscale data centre developments continue to outperform their peers.

It added that contractors involved in data centre construction have benefitted from strong private-sector demand, faster project execution and improving margins, which helped drive stronger earnings performance.

During the latest reporting season (4Q2025), results among contractors were mixed. Out of the seven companies under BIMB Securities’ coverage, two exceeded expectations, two met forecasts and three came in below estimates.

The divergence largely reflects differences in project exposure and execution cycles across the sector.

Among the companies that delivered stronger results were Sunway Construction Group Bhd (KL:SUNCON) and Ahmad Zaki Resources Bhd (KL:AZRB), while IJM Corp Bhd (KL:IJM), Cahya Mata Sarawak Bhd (KL:CMSB) and Malaysian Resources Corp Bhd (KL:MRCB) reported earnings that fell short of expectations.

BIMB Securities said contractors with greater exposure to private-sector construction, particularly data centre projects, generally recorded stronger margins and earnings resilience.

However, it cautioned that risks remain, including potential delays in project execution, cost pressures and uncertainties surrounding the pace of investment into the country’s data centre ecosystem.

“Despite these uncertainties, the sector’s medium-term outlook remains positive given the sizeable infrastructure pipeline and continued demand for digital infrastructure,” it said.

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