In a joint statement today, a group of property and contractors’ associations said the increase had directly impacted the cost of doing business.

“The increase has directly impacted the cost of doing business which has resulted in 13% to 20% hike in construction costs. Some items which have shown drastic price increases include mild steel, up to 41%, and sand, up 20%, since October 2020.

“We are worried that if these issues are not given urgent attention, the industry will suffer further and subsequently adversely impact the country’s economic growth,” said the group, which included the Master Builders Association Malaysia and the Real Estate and Housing Developers’ Association Malaysia.

Citing data by the Construction Industry Development Board and the statistics department, the associations said private sector projects comprised 65% of all projects awarded up to October.

“With such huge numbers undertaken by the private sector, it is imperative to give the same priority accorded to other sectors, to the building and construction sector, otherwise the efforts towards economic recovery would be derailed prematurely.”

The group said that among the major factors affecting the price increases were the surge in cost of raw materials, an acute shortage of foreign workers, increased logistics costs, the upward trend in prices of crude oil and the rise of energy costs.

The associations urged the government to conduct continuous monitoring and necessary enforcement to ensure there was no profiteering as well as anti-competition in the supply chain of the industry.

The entry of foreign workers must also be expedited to ease the current shortage, they said.

The group also called for the variation of price (VOP) clause in contracts for government projects to be extended for at least another 12 months, saying builders expected price volatility to remain beyond the end of the year.

“For private projects, the government must encourage project owners to introduce VOP in their contracts,” the statement added.