The Master Builders Association Malaysia (MBAM) and Persatuan Kontraktor Bumiputera Malaysia (PKBM) have raised concerns over sustained increases in key construction costs, saying broad macroeconomic indicators may not fully reflect the financial pressures faced by contractors on the ground.
In a joint media statement, the two associations said while macro-level metrics and economic data remain useful for policymaking, contractors continue to face concentrated cost increases in essential construction inputs.
They highlighted significant increases in the prices of diesel, bitumen, ready-mixed concrete and cement in recent months, alongside higher logistics, labour and operational costs.
According to MBAM and PKBM, industrial diesel prices rose 44% to RM4.26 per litre in July 2026 from RM2.95 in February, while bitumen prices increased 42% to RM3,025 per tonne from RM2,125 over the same period.
The price of Grade 30N ready-mixed concrete also increased 15% to RM402 per cubic metre from RM350, while ordinary Portland cement rose 6.7% to RM24 per 50kg bag in July 2026 from RM22.50 in June 2025.
The associations said logistics and haulage costs had risen by between 15% and 40%, following stricter enforcement on transport capacity since October 2025.
They added that contractors were also facing higher labour and operational expenses following the adjustment of the minimum wage to RM1,700, changes to the Employees Provident Fund (EPF) structure for non-Malaysian workers and record-high copper prices.
MBAM and PKBM said the impact was particularly acute for contractors operating under fixed-price contracts awarded before the latest cost increases.
“These localised material cost increases directly impact project delivery margins, particularly for small- and mid-tier contractors,” the associations said.
They cautioned that the cumulative impact of higher material, transportation and labour costs could place additional pressure on contractors’ ability to deliver projects while maintaining commercially sustainable margins.
The statement comes amid recent comments by Works Minister Datuk Seri Alexander Nanta Linggi on the overall cost impact on the construction sector.
MBAM and PKBM said they took note of the minister’s comments but stressed that national-level averages could mask cost pressures experienced at individual project sites.
Despite the concerns, both associations reaffirmed their commitment to working with the Government to advance Malaysia’s infrastructure development agenda, including major national projects and initiatives under the 13th Malaysia Plan (RMK-13).
