How do rising raw material costs impact construction firms in Malaysia?

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Rising Raw Material Costs Significantly Impact Malaysian Construction Firms

In the first half of 2026, rising raw material costs emerged as a primary challenge for Malaysian businesses, with the construction sector experiencing the most pronounced effects. A significant majority of construction firms surveyed reported higher raw material prices as a key concern, directly influencing their operational landscape. This trend underscores the vulnerability of the construction industry to fluctuations in input prices, as detailed by the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) through its Malaysia’s Business and Economic Conditions Survey (M-BECS).
Construction Sector Most Affected by Input Price Hikes

The construction industry stands out as the sector most severely impacted by escalating raw material costs. The survey revealed that 81.1 per cent of construction firms cited higher raw material prices as a significant concern. This figure indicates a widespread struggle within the sector to manage the increased expense of essential materials needed for projects.
High Operating Costs Compound Raw Material Challenges

Beyond raw material prices, construction firms are also grappling with elevated operating costs. For the construction sector, 56.9 per cent of respondents indicated that high operating expenses were a major concern. This dual pressure from both input materials and general operating expenses creates a complex financial environment for these businesses.
Widespread Concern Across Multiple Sectors

While construction is the most affected, the issue of rising raw material prices is not isolated. The manufacturing sector reported 71.2 per cent of its respondents citing this as a concern, followed by the wholesale and retail trade sector at 59.7 per cent. Similarly, high operating costs were a notable issue for manufacturing (54.1 per cent) and wholesale and retail trade (50.7 per cent), illustrating a broader economic challenge affecting multiple segments of Malaysian industry.

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How do rising raw material costs impact construction firms in Malaysia?

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