{"id":1615,"date":"2018-12-12T05:46:36","date_gmt":"2018-12-12T05:46:36","guid":{"rendered":"http:\/\/pgawards.wpengine.com\/?p=1615"},"modified":"2021-06-04T14:10:30","modified_gmt":"2021-06-04T07:10:30","slug":"malaysia-contractors-set-for-lower-margins","status":"publish","type":"post","link":"https:\/\/www.asiapropertyawards.com\/en\/malaysia-contractors-set-for-lower-margins\/","title":{"rendered":"Malaysia contractors set for lower margins"},"content":{"rendered":"<p><strong>Construction sector downgraded as government grows more prudent with spending<\/strong><\/p>\n<figure id=\"attachment_1616\" aria-describedby=\"caption-attachment-1616\" style=\"width: 1000px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"size-full wp-image-1616\" src=\"http:\/\/pgawards.wpengine.com\/wp-content\/uploads\/2019\/02\/Malaysia-contractors-set-for-lower-margins.jpg\" alt=\"\" width=\"1000\" height=\"667\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2019\/02\/Malaysia-contractors-set-for-lower-margins.jpg 1000w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2019\/02\/Malaysia-contractors-set-for-lower-margins-300x200.jpg 300w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2019\/02\/Malaysia-contractors-set-for-lower-margins-768x512.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-1616\" class=\"wp-caption-text\">Aerial view of Petaling Jaya, Malaysia. Tuah Roslan\/Shutterstock<\/figcaption><\/figure>\n<p>As the current\u00a0administration continues to cut\u00a0back on infrastructure spending, contractors in Malaysia are facing\u00a0lower-than-anticipated margins in the next term, according to UOB Kay Hian Research.<\/p>\n<p>Margins for the construction sector are poised to hover only in the range of five to six percent, down from the earlier projection of eight to 10 percent, the research house predicted.<\/p>\n<p>It also downgraded the sector to underweight. \u201cFor most of the contractors who rely heavily on government tenders, their order books are depleting as progress billings are recognised, but they are unable to replenish order books,\u201d the consultancy stated in a note issued yesterday, per\u00a0<a href=\"https:\/\/www.thestar.com.my\/business\/business-news\/2018\/12\/12\/research-houses-downgrade-construction-sector\/\" target=\"_blank\" rel=\"noopener noreferrer\">The Star Online<\/a>.<\/p>\n<p>Major infrastructure projects from the previous government have been placed under greater scrutiny since the Pakatan Harapan\u00a0came into power this year.<\/p>\n<p>Led by reelected Prime Minister\u00a0Mahathir Mohamad, the coalition has led\u00a0a chorus of voices criticising the cost\u00a0and feasibility of several projects announced under his embattled predecessor Najib Razak.<\/p>\n<p>Some contractors have resorted to monetising idle land banks for property development or diversifying to focus on order book replenishment from parent or sister companies.<\/p>\n<p>\u201cThis strategy may cushion the \u2018foregone earnings\u2019 from replenishment and provide earnings visibility in the near term,\u201d UOB Kay Hian analysts noted.<\/p>\n<p>\u201cHowever, the contract flows from this strategy may not be enough to offset the loss of government projects for certain contractors as government tenders are usually sizeable.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Construction sector downgraded as government grows more prudent with spending<\/p>\n","protected":false},"author":2,"featured_media":19863,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1615","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-report","news_country-malaysia","news_author-property-report"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Malaysia contractors set for lower margins | Asia Property Awards<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.asiapropertyawards.com\/en\/malaysia-contractors-set-for-lower-margins\/\" \/>\n<meta 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