The Challenges Towards Cost Management Amongst Contractor in the Era of Global Recovery

Abstract: The post-pandemic global economic recovery has intensified cost management challenges for construction contractors, particularly in developing nations like Malaysia. Escalating material costs, cash flow volatility, and limited financial resources have disrupted project delivery and profitability. This study examines the key cost management challenges faced by Malaysian contractors registered under Grades 1 to 3 of the Construction Industry Development Board (CIDB), evaluates their impact on financial and operational performance, and explores strategic responses. A quantitative survey involving 154 validated responses from contractors in the Klang Valley was conducted. Findings highlight material price instability, inaccurate budget forecasts during construction, and weak financial controls as the most pressing concerns—each consistently rated at the upper quartile of the response scale. These issues are closely linked to project overruns, financial strain, and reputational risk. In response, contractors identified schedule management, structured cash flow planning, post-project review, and digital tools such as Building Information Modelling (BIM) as the most effective mitigation strategies. This demonstrates that an additional advantage of efficient time management is the ability to maintain positive relationships with stakeholders and clients. Moreover, it indicates that the construction industry could benefit from a comprehensive examination of how technological advancements influence cost management practices. The results provide empirical insight into the cost pressures affecting small and medium-sized contractors during economic recovery, and offer practical recommendations for enhancing resilience, efficiency, and competitiveness in Malaysia’s construction sector.