“While a 25% hike in US steel and aluminium imports is unlikely to trigger significant price changes in local building materials, the planned rise in electricity tariffs may still pressure construction margins in the near term.

“This is because the cost of key building materials such as rebars, wire rods and aluminium extrusion products, is expected to spike in the second half of this year (2H25). “Over the medium-to-longer term, we expect the local construction supply chain to pass on the additional input costs via repricing their contracts,” the research house said.

CIMB Research attributed the construction sector’s earnings slowdown primarily to delays in major infrastructure projects in 2H24, as project billings decelerated.

On a positive note, the research house said tender activities and order flows have improved since early 2025, driven by the Penang Light Rail Transit (LRT) and more recently, LRT 3 phase two.