Strong demand for construction continues across APAC, but project delivery risk intensifies
Project delivery risk has emerged as the critical theme for the industry to navigate even as activity levels remain high Construction markets across Asia Pacific (APAC) entered 2026 in a strong position, but that momentum is now under pressure following geopolitical disruptions and energy shocks in the first half of the year. The latest Construction Market Insights mid-year report by Linesight revealed that APAC remains among the strongest growth regions for construction, supported by investment in digital infrastructure, advanced manufacturing, energy, transport, and major public programmes. Most markets within APAC experienced an expanded construction output in 2025 and are on track to sustain this positive trajectory this year. In particular, Malaysia is anticipated to lead growth in the APAC region in 2026, with a projected 6.5% increase in construction output. Other Southeast Asian markets are also demonstrating robust growth, with Singapore and Thailand expected to deliver an increase of 4.5% and 3.7% in construction output respectively. While demand remains strong, risks in project delivery are rising as market conditions are increasingly shaped by execution constraints rather than demand, influenced by persistent challenges in labour, supply chains and power availability. In an environment of intensified macroeconomic uncertainty and geopolitical disruptions, supply chains are also facing severe constraints and pressures. The report highlighted that recent tensions in the Middle East have pushed the global supply chain pressure index (GSCPI) to its highest level of 1.82 this year since July 2022. Key market-specific insights to note for 2026 and beyond include: Malaysia: Construction industry is projected to grow an average of 3.5% per year from 2027 to 2030, led by investment in industrial, transport, and energy projects. Construction inflation remains elevated at 5–6%, driven by global commodity costs and domestic subsidy and labour pressures. Data centre demand continues to rise, with strong hyperscale interest. Singapore: Construction industry is expected to […]
