Alleviating inflation in private construction projects for economic stability and strategic growth

Malaysia's construction industry has been a significant driver of economic growth, strengthened 5.0% to the total GDP in 2024 as compared to 2.9% in 2023. However, due to the economic multiplier effects and time lag between project beginning and completion, construction projects are highly susceptible to economic fluctuations like inflation. The viability and successibility of any particular projects very much depends on the accuracy of project budget. When inflation rates diverge from these projections, the cost of critical resources such as materials and labour tend to rise, resulting in cost overruns and potential stakeholder's disputes, requiring practitioners to adjust budgets and estimates. There are approximately 55% of construction projects experienced cost overruns, with public sector projects outperforming private sector. Nevertheless, current research are focusing on typical cost control measures or public-sector projects. This leads to a significant research gap in addressing inflation-specific strategies for private construction projects. From the aforementioned issues, this study aims to determine the impacts of inflation on private construction project cost management and to identify the strategies that construction industry adopted to reduce the impacts of inflation. To accomplish this study, a qualitative research approach will be carried out through semi-structured interview employing thematic analysis to determine the effects of inflation on construction project costs and mitigation strategies on different private construction projects like residential, commercial, industrial and infrastructure. The interview will target Quantity Surveyors in registered G7 contractor firm, developer and consultant firm in Johor to ascertain factors influencing inflation and strategies to mitigate the issues. The expected research outcome will be useful for private project development through enhanced project cost management especially in mitigating cost overruns and budget inaccuracies which is one of the key concerns among industry stakeholders.