KUCHING: Sarawak’s construction sector is absorbing higher building costs without signs of a material supply crunch.
Sarawak Housing and Real Estate Developers’ Association (SHEDA) advisor Datuk Sim Kiang Chiok said construction costs in Kuching and Sarawak were showing signs of upward pressure as of June 2026, following geopolitical tensions in the Gulf region and concerns over disruptions to global energy and shipping routes.
“However, there is currently no evidence of a severe shortage of construction materials, with most projects continuing according to schedule,” he said.
He noted that Works Minister Datuk Seri Alexander Nanta Linggi had recently stated that although the conflict had increased logistics, fuel and material costs, the impact remained manageable.
According to the minister, contractors were still able to absorb the price increases and ongoing infrastructure projects would not be delayed or deferred.
Sim also said that the Ministry of Works, together with the Construction Industry Development Board and the Public Works Department, had prepared short-, medium- and long-term mitigation strategies to address any further escalation in construction costs.
“For Sarawak’s private development sector, the market remained active despite higher construction expenses.
“Industry feedback showed that developers were seeing increases in diesel, transportation, steel, cement and imported building material costs.”
Nevertheless, he said local supply chains remained largely intact, with no widespread shortages of cement, steel bars, aggregates or ready-mix concrete reported in Sarawak.
“The more immediate concern is the gradual increase in input costs rather than the availability of materials,” he said.
For private developers in Kuching, he said profit margins could face some compression if material prices continued to rise.
However, he said current indications suggested that the situation was far from the severe supply disruptions experienced during the COVID-19 period.
“Unless the Gulf conflict significantly affects global fuel supplies for a prolonged period, Sarawak’s construction sector is expected to remain resilient, with moderate cost escalation rather than a full-blown supply crisis,” he said.
Looking ahead, Sim said there were reasons for cautious optimism following the recent Memorandum of Understanding signed between the United States and Iran.
“The MoU had helped ease concerns over global energy supply disruptions and paved the way for the reopening of the Strait of Hormuz, a critical route for about one-fifth of the world’s oil and liquefied natural gas trade.
“Following the announcement, global oil prices retreated significantly, with Brent crude and WTI crude falling to their lowest levels in several months as markets priced in the prospect of improved supply conditions.”
For Sarawak’s construction and property development sector, Sim said lower oil and fuel prices could gradually reduce transportation, logistics and manufacturing costs linked to cement, steel, aggregates and other building materials.
“While the benefits may take several months to filter through the supply chain, developers and contractors were hopeful that the recent price pressures experienced during the Gulf conflict would ease in the second half of 2026.
“Nevertheless, industry players remain watchful as the peace agreement is still at an interim stage and any renewed disruption to global energy markets could once again impact construction costs,” he said.
