The Master Builders Association Malaysia (MBAM) has welcomed Budget 2027’s infrastructure and development allocations but said the success of the spending plan will ultimately depend on timely project implementation, transparent procurement and measures to help contractors absorb rising labour and material costs.
MBAM noted that the RM459.8 billion federal Budget includes RM83 billion in development expenditure, with RM17.6 billion allocated to the transport subsector and RM37.7 billion to the broader economic sector.
The association also welcomed an increase in financing and guarantee facilities, including higher coverage under the Syarikat Jaminan Pembiayaan Perniagaan and Credit Guarantee Corporation schemes, saying easier access to working capital would help contractors invest in machinery and technology.
Among projects highlighted by MBAM were the RM2.5 billion National Non-Revenue Water programme, rural infrastructure and road works, and continued spending on the Pan Borneo Highway, Sarawak-Sabah Link Road and other infrastructure projects in Sabah and Sarawak.
For smaller contractors, MBAM called for rural and community projects to be tendered promptly in the first half of 2027 and for payments to be made on time, noting that cash flow remains a major constraint for Grade G1 to G4 contractors.
The association also welcomed the government’s decision to reintroduce the Variation of Price clause to address increases in diesel and bitumen costs, but urged that the mechanism be extended to other construction materials.
However, MBAM cautioned that the increase in the minimum wage from RM1,700 to RM2,000 from June 2027, together with a proposed RM2,500 minimum wage for semi-skilled and graduate positions, would raise costs for the labour-intensive construction industry.
It called for a clear price-adjustment mechanism for existing public and private contracts to prevent higher labour costs from being passed through into more expensive construction projects and property prices.
MBAM also backed the RM8 billion allocation for technical and vocational education and training and programmes to expand robotics and digital skills, saying productivity improvements would be essential to reduce dependence on foreign labour and offset higher wage costs.
On governance, the association welcomed the planned implementation of the Government Procurement Act in 2027, including greater disclosure of contractors and contract values, saying transparent and rule-based procurement would strengthen accountability and protect capable contractors.
