Technology, property and construction sectors booming in Penang
10 May 2024
Penang is witnessing robust growth in its technology, property and construction sectors amid an ongoing economic boom in the state.
Buoyed by continued investment inflows, particularly in the electrical and eletronics (E&E) industry, and supported by infrastructure upgrades, Penang has reported an increase in job creation and growth in household disposable income leading to surging demand for real estate.
RHB Research, in its thematic report on Penang yesterday, noted that government incentives and the forthcoming light rail transit (LRT) in the state would further stimulate investments and job creation, and drive growth in the technology, property, and construction sectors.
In the technology sector, the brokerage pointed out that Penang is a thriving E&E hub benefiting from the recovery of the semiconductor sector and the repercussions of the US-China trade tensions.
“Its established E&E and manufacturing industries are positioned to capitalise on heightened investment in technology and medical technology supply chains, presenting vast business opportunities for local companies from design houses and outsourced manufacturing to engineering support and material supply and support services,” said RHB Research.
In construction sector, an increase in activities is providing vast opportunities to local contractors.
“The construction sector in Penang will continue to shine, in our view, buoyed by ongoing projects such as Seri Tanjung Pinang 2, escalating demand for E&E facilities, and property projects, alongside the impending Penang LRT Mutiara Line.
“This heightened infrastructure rollout is set to benefit contractors, with an estimated RM10bil to RM20bil worth of contracts anticipated in the coming years, driven by the Penang Transport Master Plan and development of Silicon Island,” it added.
RHB Research said the property sector is also benefiting from the burgeoning activity in the E&E space, major infrastructure upgrades, and rising income per capita.
For perspective, Penang’s E&E sector registered a five-year compounded annual growth rate of 12.1% from RM209mil in 2018 to RM341mil in 2022, while its gross domestic product per capita had risen to RM69,700 in 2022 from RM44,800 in 2015.
“The proliferation of new industrial parks like Batu Kawan Industrial Park 2, Penang Technology Park @Bertam, and AME Elite Consortium Bhd’s Northern Industrial Park are set to fuel job creation and population migration,” added the research house.
Source: The Star
