Higher standards needed for property and construction industry to survive global uncertain times

By Yip Wai Fong

With recent conflicts in Iran pushing up oil and diesel prices, the challenges of escalating building material prices are once again on the horizon for the property and construction industry. For industry professionals, the latest burst of volatility is yet another call for the industry to shift its operation to a higher, more efficient standard. That means that the industry must also grapple with issues such as low technological adoption, reliance on foreign workers and wage stagnation.  

“The industry has to change. If it sticks to the same way of operating, it will go out of business very soon. The recent rise in diesel prices, due to the Iran conflict, will lead to rising construction material prices and eventually property prices. The longer a contractor takes to complete a project, the riskier his position will be because of the uncertainties happening globally,” said chartered quantity surveyor and dispute and claim consultant Chong Wai Kien, referring to the rise in diesel prices from RM3.12 to RM3.92 in Peninsular Malaysia, reflecting a similar price surge in many other countries. 

“Savvy contractors who pivoted to Building Information Modelling (BIM) and Industrialised Building System (IBS) move on faster from project to project and generate more revenue,” he added.  

Having served the property and construction industry for 18 years, including memberships in the Royal Institution of Surveyors Malaysia (RISM) and the Chartered Institute of Arbitrators (FCIArb), Chong argued that there should be a stronger push for the industry to adopt innovation. He noted that although the government, through agencies such as the Construction Industry Development Board (CIDB), has formulated several forward-thinking policies in recent years such as the Construction 4.0 Strategic Plan and the National Construction Policy 2030, the execution of these policies has not kept pace.

Low tech adoption rate

As recently as February this year, CIDB and the Works Ministry have launched the Construction Action Plan 2026-2030 (CAP 30). It outlines five targets, including greater adoption of digital construction platform BIM, IBS, digital twins and AI. Chong commented that some of the targets have been a continuation of previous policies, raising questions about the progress over the years. 

“Industry professionals are aware that the government wants the industry to move towards using BIM more widely but I don’t see any concrete drive from the government. If the government is serious, it can require, for example, tenderers for public works to submit BIM documentation. This will make contractors want to develop the capacity for using BIM,” he suggested. 

Chong estimates that BIM is used in only 10% to 20% of construction projects, predominantly by large companies or government-linked companies (GLCs) while smaller companies are challenged by cost and talent shortage.

“Smaller players are not using BIM because of the cost and also the lack of skilled manpower. The harsh reality is that, even if these companies have the software, they encounter difficulties in hiring the operators, because the latter would prefer going to larger companies that pay well,” Chong shared. 

“Our local universities had only started teaching BIM around 2014. This is why we don’t have a large pool of graduates who are skilled in using BIM. It is harder for the earlier generation of graduates to get hands-on experience in BIM because they are now involved in management rather than operations. Perhaps with more Gen Z learning BIM now, we might be seeing more BIM professionals in the near future,” he said. 

Making it mandatory, promoting start-ups

Chong also noted that private sector players, driven by profit, require an initial push from the government to adopt change. However, they generally become receptive once they realise these measures improve their costing. This was the case for IBS, where the government mandated its use for school construction projects from 2010 onwards. Furthermore, the required IBS score for private project building plan applications was raised from 50 to 70 in 2024.

“Using IBS saves time, is cost-effective in the long run and produces better quality. Time saving happens because IBS is prefabricated in a factory and installed on-site. Compared to the conventional method, where workers have to build the formwork, pour in concrete and wait for it to harden, IBS is much faster. 

“IBS may be expensive but the time-saving advantage allows work to be done faster. The quality is also consistent because it is produced from templates, whereas in conventional construction, quality differs because each worker has a different level of workmanship,” Chong elaborated. 

“Contractors nowadays are aware of the advantages and most of the medium to large-scale projects use IBS systems. In the early days, the awareness of IBS was low, until the government started the IBS requirements,” he added.  

Another softer approach is for the government to promote more start-ups in construction technologies. This will create an eco-system that benefits the private sector and enlarges the pool of skilled workers

“We have many IT start-ups but we hardly have start-ups in construction technologies such as BIM solutions. The government should promote the formation of such start-ups. Construction companies can work with these start-ups for technological services instead of hiring, so that they can focus on the construction aspect while the start-ups take care of the technological aspect. This creates more jobs and opportunities for the younger generation while the older construction professionals can focus on their management roles,” he suggested. 

Looking back at the industry’s need for change, Chong is also candid about its financial implications. While authorities may set ambitious targets, someone must eventually foot the bill.

“The policy targets are good but at the end of the day, it will incur costs for project owners. The private sector cannot do it alone,” he concluded.

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