Malaysia’s construction sector is projected to experience stronger earnings and order book growth in the second half of 2026, driven by progress in major infrastructure projects and ongoing investments in data centres. Industry analysts highlight that contractors with substantial backlogs and efficient execution capabilities are best positioned to benefit as project billings accelerate and new contracts are secured.
BIMB Research retains an “overweight” rating on the sector following a generally resilient earnings reporting season. Notable companies such as Gamuda Bhd, Sunway Construction Group Bhd (SunCon), and Kerjaya Prospek Group Bhd posted results broadly in line with expectations, while Econpile Holdings Bhd and Gabungan AQRS Bhd reported earnings that exceeded forecasts. The research house points to data centres as the sector’s primary growth driver, noting that exposure to this area has expanded beyond SunCon.
SunCon holds the largest concentration in data centre-related projects, commanding a record order book estimated at RM10.5 billion, with approximately RM7.4 billion tied to data centre contracts. Its active data centre tender pipeline currently exceeds 700 megawatts. Meanwhile, Gamuda’s construction order book has grown to around RM59.6 billion following a RM3.57 billion award for hyperscale data centre projects in Port Dickson. Gamuda’s outstanding data centre-related projects account for about RM9.4 billion, representing roughly 16% of its total backlog.
BIMB Research notes a sector-wide shift from an earnings recovery phase towards sustained order replenishment and progressive execution. Several contractors now hold record or near-record order books, underscoring a move to longer-term growth fundamentals rather than short-term earnings rebound.
TA Research also maintains an “overweight” stance, citing robust outstanding order books, a steady rollout of projects, and improved earnings visibility as supportive factors. It anticipates stronger earnings for contractors in the second half of the year, propelled by healthy backlogs and accelerating progress billings as projects enter more active stages.
The research house identifies key infrastructure projects expected to buoy the sector, including the Penang Light Rail Transit Segment 2 package, valued between RM4 billion and RM5 billion, and the Johor e-ART project, with an estimated value of RM7 billion to RM8 billion. Growth in private construction activity is also forecast to improve alongside the domestic property market, supplemented by ongoing development in the Johor-Singapore Special Economic Zone, semiconductor investments, and data centre expansion.
Within this context, Gamuda and Kerjaya Prospek are highlighted as prime beneficiaries. Gamuda’s record RM59.6 billion unbilled order book provides strong earnings visibility, while Kerjaya Prospek has growth prospects in industrial property construction, data centres, and grid-related mechanical and electrical works for Tenaga Nasional Bhd.
BIMB Research favors Gamuda and SunCon due to their record order books, diversified data centre exposure, and multi-year earnings visibility. The firm expects Gamuda to enter a phase of heightened earnings conversion as its early-stage backlog moves into peak execution, while SunCon is projected to maintain strong construction margins.
An industry analyst noted that ongoing order book replenishment remains critical for sustaining growth momentum, emphasizing the importance of disciplined cost management and timely project execution amid a competitive market environment.