GEORGE TOWN: The value of jobs given out this year to the construction and renovation industry in Penang is expected to be around RM6bil, compared with RM9.25bil a year ago.
Penang Master Builders and Building Material Dealers Association president Datuk Lim Kai Seng told StarBiz that the number of jobs to be given out this year in Penang was around 400, compared with 539 in 2013.
“The reason for the slowdown is because many of the important construction jobs from the Government had already been given out in 2013.
“Last year saw a record 539 jobs worth RM9.25bil being given out,” Lim said.
For the first nine months of 2014, some 308 jobs valued at RM3.3bil were given out, compared with 289 worth RM5.3bil in the corresponding period of 2013, according to the latest Construction Industry Development Board report.
Of the 308 jobs, some 45 were from the government sector, while the balance 263 were from the private sector.
“We hope to see more jobs being tendered out in the final quarter of this year so that the figures will improve,” he said.
On the value of construction and renovation jobs to be created by the private sector in Penang over the next three to four years, Lim said that of the RM4.56bil worth of new properties planned for launch this year by developers from Penang and Kuala Lumpur, about 40% or RM1.8bil would be generated for the construction industry.
“Some RM600mil or 30% of RM1.8bil will go to renovation companies.
“A total of RM2.4bil will be spent over a three to four-year period,” Lim said.
It was reported in March that Kuala Lumpur and Penang-based developers would develop RM4.56bil worth of residential and commercial projects in Penang this year amid the challenging environment for the property sector.
Developers set to launch new projects include IJM Land Bhd (gross development value, or GDV, of RM538.5mil), Mah Sing Group Bhd (RM280mil), DNP Land Sdn Bhd (RM800mil), Wing Tai Malaysia Bhd subsidiary Ideal United Bintang (RM935mil), Tambun Indah Land Bhd (RM616mil), Sunway Bhd (RM290mil), SP Setia Bhd (RM300mil) and Eastern & Oriental Bhd (RM800mil).
On the impact of the goods and services tax (GST), Lim said the price of construction materials might rise by 2% to 3% after the introduction of the GST in April next year.
“But that would have a minimal impact on construction costs,” he said.
Lim added that as the price of oil had dropped to about US$80 (RM266) per barrel from about US$100 a year ago, the price of construction materials would also stabilise.
“This will enable developers to build more quality affordable housing schemes, which is in line with the state and federal government’s objective to make such projects accessible to the mid-range income earners,” he said.