Page 9 - Malaysia Builders Directory 2019/2020
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                 MALAYSIA BUILDERS DIRECTORY 2019/2020
  Growth in the mining sector declined further as oil production was affected primarily by unplanned facility closures in Peninsular Malaysia and Sabah. Growth was also weighed by weaker natural gas production as operations were affected by unplanned closure of gas facilities in Sarawak.
The construction sector registered lower growth reflecting slower activities in the non-residential, civil engineering and special trade sub-sectors. The near completion of large petrochemical projects resulted in a lower growth for the civil engineering sub-sector. The special trade sub-sector’s growth moderated due mainly to declining early works from transportation projects transitioning to mid-phase. In the non-residential and residential sub-sectors, growth remained weak due to the oversupply of commercial properties and a high number of unsold residential properties.
The global economy is expected to expand at a more moderate pace in 2019. The temporary boost to US growth from fiscal stimulus is expected to fade, while domestic demand in the euro area is slowing. Economic activity in the Asian region is also expected to be lower, given softer external demand. Nevertheless, in China, active counter-cyclical policy will provide some support to the outlook as the government seeks to manage the external headwinds. On balance, risks to the outlook remain tilted to the downside. Policy support in China could lead to stronger-than-expected growth and spill-overs to emerging
markets. However, downside risks predominate from prolonged weaknesses in the euro area, further delays and uncertainties in Brexit negotiations, as well as a potential escalation of trade disputes.
Against the backdrop of a challenging global environment, growth in the Malaysian economy is expected to remain broadly sustained for the year. Growth will be supported by continued expansion in domestic demand amid a moderate support from the external sector. Private sector spending is expected to remain the key driver of growth. Although consumer sentiments have moderated from its recent peak, household spending will be underpinned by continued income and employment growth.
Investment activity is estimated to improve, driven by ongoing capacity expansion in key sectors, with additional support from new manufacturing investments, as reflected by the high investment approvals. Nevertheless, overall growth may be partially weighed down by lower public sector spending.
Risks to growth remain tilted to the downside, arising mainly from external uncertainties such as further weakening of global growth and heightened financial market volatility. On the domestic front, unexpected interruptions in commodity production could also affect Malaysia’s growth prospects.
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