PETALING JAYA: Data centre (DC) job flows are expected to pick up in the second half of financial year 2026, with finalisation of up to six large-scale DC facilities worth RM1bil to RM2bil each, says MBSB Research.
In a note, the research house said this would reinforce DCs as the construction sector’s key private-sector growth engine.
Meanwhile, MBSB Research estimates RM12bil to RM14bil of visible public infrastructure awards moving into the second-half period, led by mega infrastructure projects and supplemented by hospitals, government buildings and transit-orientated development projects.
The next major milestone, according to MBSB Research, is the Penang light rail transit Civil Main Contract 2 package with RM4bil to RM5bil in project value and targeted for November 2026.
Meanwhile, Langat 2 Phase 2 (RM3bil to RM4bil) has entered procurement following pre-qualification for Packages 1 and 2, while Sungai Rasau Phase 2 (RM2bil to RM3bil) could provide further water-related packages.
Kerian Water Engineering, Procurement, Construction, and Commissioning (RM4bil to RM5bil) has also moved closer following the signing of the 40-year Bulk Water Supply Agreement in July, with Gamuda Bhd
as the direct beneficiary.
Collectively, MBSB Research said these should anchor near-term order book replenishment into year-end.
Budget 2027 remains a key watch area for the potential of further acceleration in rail, water, grid and flood-mitigation spending.
Looking ahead, it has maintained its positive stance on the construction sector, underpinned by record DC awards and an improving public infrastructure pipeline.
Year-to-date (y-t-d) DC awards have reached RM15.58bil, already 68.3% above 2025. The average contract size is 16.5% higher at RM1.04bil and further hyperscale opportunities are in the pipeline.
Large contractors remain the key beneficiaries of the DC boom.
Gamuda emerged as the new leader, capturing 47.5% of y-t-d awards and overtaking Sunway Construction Group Bhd (SunCon) at 36.1%, while IJM Corp Bhd accounted for 4.2%, bringing their combined share to 87.8%.
Commenting on the second-quarter sector results, MBSB Research said the construction and building materials sectors delivered a resilient quarter despite higher diesel costs amid Middle East tensions.
SunCon, Malayan Cement Bhd and Press Metal Aluminium Holdings Bhd have exceeded earnings expectations.
Meanwhile, Statistics Department data showed that the construction sector extended its growth streak to a fourteenth consecutive quarter, with growth picking up slightly to 8.8% year-on-year (y-o-y) in the second quarter of financial year 2026.
The value of work done reached RM47.8bil, bringing the first-half value to RM94.3bil, up 8.7% y-o-y.
Civil engineering remained the largest contributor at RM16.7bil or 35% of total construction activity, comprising RM8.1bil of utility projects and RM6.9bil of roads and railways, followed by non-residential buildings at RM14bil (29.3%), residential buildings at RM10.9bil (22.8%) and special trade activities at RM6.2bil (12.9%).
On costs, MBSB Research noted that steel bar prices rebound slightly, while bulk cement softens month-on-month after eight months.
“Nevertheless, average bulk cement prices elevated 5.8% y-o-y, reflecting healthy demand from DCs, industrial developments and infrastructure projects, although higher coal procurement costs could continue to place pressure on cement producers’ margins,” it added.
