KUALA LUMPUR, 12 December 2025 — CIMB Investment Bank is forecasting a 6–8 per cent rise in earnings for companies in Malaysia’s building materials sector in 2026, driven by a renewed pipeline of construction activity and robust order flows, according to industry research shared with clients on Friday.
Analysts at CIMB highlighted several key factors supporting the sector’s earnings trajectory, including stronger demand from infrastructure projects, residential and commercial property rollouts, and improved commodity pricing dynamics that favour local producers.
Stronger Construction Activity Underpins Sector Rebound
CIMB’s research note points to a broad uptick in construction activity as a core driver of improved prospects for cement makers, steel producers and building materials manufacturers. The anticipated growth is anchored by:
- Public infrastructure investments scheduled under national development plans
- A rebound in private property deliveries following project delays
- Strengthened commercial real-estate demand in urban centres
- Rising activity in industrial and logistics facilities
These activity trends are expected to translate into higher volumes and better pricing power for building materials companies in 2026.
Sector Fundamentals Look Healthier Than 2025
While 2025 saw muted growth for building materials players due to sluggish project rollouts and cost pressures, CIMB analysts believe the sector is positioned for a rebound next year:
- Raw material costs have stabilised, easing margin pressures.
- Price pass-through mechanisms in key segments are improving.
- Backlog orders for infrastructure and property developments are giving firms stronger visibility into 2026 revenue.
“These trends support a sustainable earnings expansion of 6–8 per cent for building materials players in the coming year,” the analysts wrote.
Leading Players and Market Positioning
CIMB did not single out specific companies in its public note, but major producers in the building materials ecosystem such as cement firms, steel distributors and construction chemical manufacturers are expected to benefit disproportionately from the projected rebound. Investors are watching corporate earnings calendars closely for signs of early 2026 momentum.
Implications for Malaysia’s Construction and Property Markets
The improved outlook for building materials earnings comes at a time when other macro indicators are showing signs of stabilisation:
- Labour markets remain steady, supporting housing demand.
- Ringgit strength and stabilised cost structures have aided input cost management.
- Government infrastructure spending commitments remain intact for the medium term.
A stronger building materials sector can have positive knock-on effects across supply chains, from equipment suppliers and contractors to real-estate developers and logistics providers.
Investor and Market Risk Considerations
Despite the rosy earnings forecasts, CIMB cautioned that risks remain, including:
- Policy uncertainty around major property curbs or fiscal tightening
- Volatility in commodity prices (e.g., fuel, energy, metals)
- Execution risk in delayed infrastructure projects
Nevertheless, markets have generally responded favourably to early signs of sector re-acceleration, with building materials stocks outperforming broader market indices in recent sessions.
