KUALA LUMPUR: The local construction supply chain remains relatively shielded from uncertainties arising from the US government's latest tariff measures, a factor that continues to attract foreign investment. KUALA LUMPUR: The local construction supply chain remains relatively shielded from uncertainties arising from the US government's latest tariff measures, a factor that continues to attract foreign investment. According to CIMB w Securities Sdn Bhd, this resilience is largely due to the sector's strong domestic focus. The firm noted that even in the case of Gamuda Bhd s w , its major overseas construction markets, namely Australia and Singapore, are subject to only minimal export tax rates of 10 per cent to the US. In addition, it said both Australia and Taiwan are classified as Tier 1 markets under the United States government's chip export control measures. It added that Gamuda s w 's overseas markets contributed nearly two-thirds of its revenue for the first half of 2025 (1H25), while accounting for 54 per cent of net profit during the same period. "On the other hand, knock-on effects from the high 46 per cent US reciprocal tariffs on Vietnam's overall economy may weigh on Gamuda s w 's property sales in the country, which is projected to account for half of the group's RM6 billion total sales target for financial year 2025 (FY25). "That said, the first two phases of Eaton Park in Ho Chi Minh City are projected to contribute RM1.1 billion or 37 per cent of Gamuda s w 's forecast Vietnam property sales for FY25. "These phases have been fully taken up, while our FY25 property sales forecast for Gamuda s w of RM5.2 billion is about 13 per cent lower than the company's target," it said in a note today. Nevertheless, CIMB w Securities noted that interest in Malaysian contractors remains skewed to the upside, despite growing risk aversion driven by global macroeconomic headwinds. This is especially if fresh foreign portfolio trades return in a larger way once there is greater clarity on the ripple effects of the external tariffs. "Moreover, steel and cement prices, already subject to higher import tariffs of 25 per cent by the US under Section 232 effective from March 12, are likely to stay muted in the short term owing to potential trade diversion activities and weaker demand. Gamuda s w remains our top sector pick, given its diversified earnings base, potential upside to its end-2025 order book target of RM40 billion to RM45 billion (Jan 2025: RM36 billion) through RM35 billion worth of high-conviction bids, and manageable net gearing position of 39 per cent. "Key risks to the sector include delays in the rollout of major infrastructure projects and an increase in the cost of imported construction machinery and equipment," it added. Meanwhile, Hong Leong Investment Bank Bhd (HLIB Research) said domestic contract awards in the first quarter of 2025 (1Q25) got off to a strong start, reaching RM16.4 billion. This represents a 135 per cent year-on-year (YoY) increase and is the highest quarterly total since 1Q16. The firm added that infrastructure contracts nearly doubled on a sequential basis, led by major wins such as Penang LRT Segment 1 and LRT3. This strong momentum supports expectations of a healthy job flow environment in 2025. As such, HLIB Research anticipates stronger project flows from the infrastructure segment, although there may be a slight moderation in the commercial and residential space. Separately, it said the data centre segment remains resilient, although some new risks have emerged. "For now, we stay 'overweight' on the construction sector and are still anticipating healthy job flows anchored by infra and data centre projects. Gamuda s w , with a 'Buy' call and a target price of RM5.43 , remains our top sector pick," it noted..