Members of MBAM are glad to take note that the Construction Sector has achieved a growth of 15.5 % in Q1 2012 as announced by the Governor of Bank Negara. This was due particularly to increase in the civil engineering and residential sub-sectors. With increased momentum in implementation of various projects, the construction sector is expected to contribute significantly to maintain the growth of the national economy this year in the region of 4 to 5 %, in view of uncertain external conditions. To maintain further the momentum, MBAM urges attention of the Government to the three main factors affecting the construction sector as follow:

1) Manpower
The industry is facing shortage of skilled workers. It is of urgent concern that this shortage be met and we request the Government to allow importation of foreign workers from more source countries in ASEAN, China and India. Furthermore, as we need more skilled and well trained workers for the heavy engineering sector like MRT projects, we appeal that skilled workers from China be allowed to work on these projects as many Chinese workers are now available after completing MRT and high speed rail projects in China.

2) Heavy Construction Machinery
Current import duty and sales tax are comparatively high when compared with other ASEAN countries that have on average about 5% to 15% total import duties and Sales Tax/VAT. The following are some current import duties of construction machineries in Malaysia:

Many of the mobile cranes are in poor working conditions and some are as old as 30 years old.  Since the Government is pushing for productivity enhancement in order to achieve high income and  reduce dependence on foreign workers, we hope the Government would consider further liberalization and  the reduction of import duties and sales tax. This will encourage use of new and bigger capacity machineries in the construction industry which will help enhance productivity and reduce dependence on foreign workers. With the use of newer and safer machineries, we believe accident rates will also reduced.

3) Building Materials
With the many projects under implementation, MBAM sees that the capacity of local manufacturers of building materials will be better utilized. With a lower inflation and  better optimization of invested capacity, we expect a stable supply and prices of major building materials will be maintained within reasonable range to sustain the economy and production capacity thus employment.

In view of the above positive factors and the consideration of the Government to resolve matters raised for the improvement of the Malaysian construction industry, MBAM is positive of the growth of the construction industry this year and will work closely with the Government to ensure delivery of all projects being implemented. We will play our role to transform the industry to achieve higher productivity through higher mechanization, standardization and higher skill sets of the work force.

Kwan Foh Kwai JMN
PRESIDENT