• Contraction in construction sector deteriorated in 2Q20
• Growth in volume index of distributive trade plummeted in 2Q20
• Services sector registered lower revenue in 2Q20
• GDP to contract in 2Q20 but gradual recovery to start in 3Q20 

Contraction in construction sector deteriorated in 2Q20

The value of construction work done in 2Q20 contracted by 44.9% yoy (1Q20: - 6.3%), amounting to RM19.8bn (1Q20: RM35.0bn). The qoq basis showed decline of 43.6% as compared to the previous quarter (1Q20: -5.2% qoq).

All construction activities slowed down in 2Q20 due to the closing in construction activities during the implementation of Movement Control Oder (MCO) affected by pandemic Covid-19. The decline was contributed by civil engineering (2Q: - 55.2%; 1Q: -2.3%), residential buildings (2Q: -38.7%; 1Q: -7.6%), non-residential buildings (2Q: -36.2%; 1Q: -11.0%) and special trades activities sub-sectors (2Q: - 28.7%; 1Q: -8.6%).

The civil engineering sub-sector remained dominant as the main contributor to the value of construction work done with 36.4% share. Non-residential buildings contributed 29.4%, residential buildings (27.3%) and special trades activities (7.0%).

The private sector continued to propel the construction activity in 2Q20 with 62.2% share of value of construction work done (RM12.3bn) as compared to the public sector with 37.8% share of value of construction work done (RM7.5bn). The value of construction work done in residential and non-residential buildings subsector remained significant in the project owned by the private sector which contributed 41.5% and 36.7% respectively. Meanwhile, the project owned by the public sector was underpinned by the civil engineering sub-sector with 71.0% share.

Selangor recorded the highest value of construction work done in 2Q20 with RM5.4bn or 27.3% share. This was followed by the Wilayah Persekutuan and Johor respectively by 19.4% and 12.2%.

Source: BIMB Securities Research - 11 Aug 2020