Survival Strategies and Challenges Faced by Subcontractors in Malaysian Construction Industry

The construction industry is one of the biggest sectors in Malaysia’s economic productivity. Due to the declining Gross Domestic Product (GDP) growth rate in Malaysia in the past five years, the construction industry is going through a slow growth of development. This phenomenon is currently creating problems to the contractors, and especially to the subcontractors. Hence, it is important to investigate how subcontractors survive the economic downturn-where the market conditions are available only for limited projects, and what are the strategies undertaken for business survival to sustain themselves in the competitive environment. The purpose of this paper is to identify the survival strategies and common challenges that subcontractors faced in the construction industry. The findings identified the common challenges, and the survival strategy actions that could be considered by the subcontractors as a reference, especially when faced with situations that threaten their business survival and prepare themselves before the economic downturn. A detailed literature review is conducted to sort out the common survival strategies and challenges that have been discussed in previous research. Questionnaires were designed and distributed accordingly to the target local contractors which are registered under CIDB located in Klang Valley as respondents of this study. The collected data was analysed by using the Relative Importance Index (RII) for ranking to determine the common adoption discussed by the respondents during the downturn period. The findings discovered that majority contractors are aware of the type of survival strategies can be take in action during prolonged downturn.