KUALA LUMPUR: The newly imposed 24 per cent reciprocal tariff on Malaysian imports into the United States, effective April 9, is expected to have minimal direct impact on the domestic construction sector, according to MIDF Amanah Investment Bank Bhd.
In a sectoral note released today, MIDF highlighted that the construction industry remains primarily domestic in nature, distinguishing it from export-reliant sectors such as automotive and consumer electronics. As such, it is largely insulated from direct trade shocks, though secondary effects through cost inputs could arise.
“While the tariffs may exert upward pressure on input costs—particularly steel or cement if global supply chains are disrupted—most of the construction companies under our coverage have no direct revenue exposure to the US market,” the bank stated.
The companies cited include Malaysian Resources Corporation Bhd, WCT Holdings Bhd, Malayan Cement Bhd, Cahya Mata Sarawak Bhd, Gamuda Bhd, and Sunway Construction Group Bhd (SunCon). These firms primarily operate within Malaysia, limiting their vulnerability to international tariff policies.
MIDF noted that IJM Corporation Bhd has minor exposure to the US through exports of industrial concrete products, but this is not expected to materially affect its overall outlook. Even in cases like SunCon’s data centre projects for US-based hyperscalers, the work is executed within Malaysia and hence unaffected by the tariffs.
“Overall, the broader construction sector remains well-shielded from the immediate implications of the US-Malaysia tariff action,” MIDF stated, while acknowledging potential indirect risks from fluctuations in global raw material prices.
The investment bank remains positive on the construction outlook, citing a favourable cost environment, stable input prices, and continued momentum in industrial and infrastructure projects.
Steel bar prices, for instance, have continued to decline for the fourth consecutive month due to global oversupply. Meanwhile, domestic cement prices remain steady, underpinned by controlled production levels and stable raw material costs. This pricing environment has helped cushion contractors against margin erosion.
“Despite geopolitical uncertainties such as the Liberation Day tariffs, we see limited downside risk to the sector, given its domestic focus, low exposure to US markets, and manageable input costs,” MIDF added.
As of February 2025, cement prices in Malaysia have held steady at RM380 per tonne for the 19th straight month since July 2023. This prolonged stability reflects a balanced supply-demand landscape and disciplined cost management within the industry.
