Labour and Home Renovation Costs To Increase In Further

With the fall in crude oil price from $110 in June 2014 to its current price of about $50 as of March 2015, the world economy as a whole has been hampered by low consumer confidence and a slow growth. Many economists are not so optimistic about the outlook of 2015. Looking beyond the gloom, the construction industry in Malaysia can have something to look forward to this year.


One key reason for the optimism is the high levels of state and private sector investment, which will drive double-digit growth in Malaysia’s construction industry this year, with momentum likely to be maintained into 2015 as more infrastructure projects roll off the drawing board.

The Master Builders Association Malaysia (MBAM) and the Construction Industry Development Board (CIDB) Malaysia forecasts growth of at least 10 per cent, the third consecutive year of double-digit expansion. Some might argue an overestimation, but undoubtedly the construction industry will be experiencing positive growth.

The chairman of CIDB Malaysia, Tan Sri Dr Ahmad Tajuddin Ali, reiterated that the industry would benefit from increased investments in infrastructure development. “Currently, we have mega projects, particularly the light rail transit (LRT) and MRT, which involve local and foreign companies and they provide jobs to the people, directly or indirectly,” he told a media briefing in September.

Spurred on by massive capital expenditure projects, growth in the construction sector has been outpacing GDP expansion in recent years.The government’s Economic Transformation Programme (ETP) and public-private partnership (PPP) projects have spearheaded much of this growth. This led to a multiplier effect across the industry, which expanded by 11.4 per cent, 4.7 per cent, 18.1 per cent and 10.1 per cent from 2010 to 2013, respectively, according to data from Bank Negara Malaysia (BNM), the central bank.

All the mass projects have undoubtedly opened a new chapter in recognition to the capabilities of the local companies and Malaysians. In addition, thousands of job opportunities have been created through the project including at the professional levels, besides attracting many Malaysian nationals working abroad to return home.


You must be thinking “Great, this is a step forward for our country but how does this affect us and our own renovation projects?”

Well for starters, people who are planning to renovate their homes or offices might find that cost of labour has increased. This is all backed up by the Labour Cost Index (LCI) data provided by the CIDM. The empirical evidence shows that indeed cost of labour has increase by approximately 2-4% since the start of the year, with variation across different scopes of work done from contractors, plumbers to carpenters.

On the other hand, material costs on the other hand has been steadily decreasing. This is according to CIDM.

For whatever reason, the change in labour cost is an opportunity for contractors to increase prices.As a smart consumer, it will be wise to compare quotes from various contractors before beginning your renovation project. Kaodim delivers you up to 5 quotations from different contractors whenever you submit a request, all for free. You can easily compare prices and speak to the contractors directly or via our in built messaging system. Not only does this save you time and effort, you can be assured of the quality of work from real user reviews on the contractor.

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