The "Indonesia Construction Industry Databook Series - Market Size & Forecast by Value and Volume (area and units), Q1 2024 Update" report has been added to ResearchAndMarkets.com's offering.

The construction industry in Indonesia is expected to grow by 6.4% to reach IDR 2,223,724 billion in 2024. The growth momentum is expected to continue over the forecast period, recording a CAGR of 5.4% during 2024-2028. The construction output in Indonesia is expected to reach IDR 2,747,443.4 billion by 2028.

The Indonesian construction market is offering strong growth opportunities to global firms. The consistent spending on infrastructure development, with the plan to build a new capital city, has lured players Daewoo Engineering & Construction to expand their presence in the Southeast Asian country. Going forward, in 2024, more global firms are expected to increase their presence in Indonesia.

Alongside the infrastructure sector, the residential market is also poised to record strong growth over the medium term. The introduction of several housing market stimulus measures will aid the demand in the Indonesian market. The Omnibus Law, for instance, introduced two measures aimed at enticing foreign investors. This coupled with the reintroduction of VAT incentives means that the demand will remain upbeat over the medium term in the residential construction market.

Infrastructure spending by the government to support the construction market in Indonesia in 2024

Over the last few years, the Indonesian government has increasingly focused on infrastructure development across the region to boost connectivity. This has been one of the major growth drivers for the construction industry growth in Indonesia. According to the finance minister, the country has spent nearly US$30 billion or IDR 455.8 trillion on infrastructure projects in 2023.

The spending, albeit a bit lower compared to last year, is expected to further support the construction industry in 2024. The Indonesian government, notably, has allocated over IDR 423 trillion for infrastructure development in 2024. This, however, is significantly higher compared to 2014, when the government allocated approximately IDR 155 trillion. The infrastructure spending, in 2024, is expected to drive productivity through connectivity and mobility infrastructure in Indonesia.

South Korean construction firms are eyeing more infrastructure deals in the Indonesian market in 2024

Daewoo Engineering & Construction is planning to expand its presence in the growing Indonesian market. This comes at a time when there is a high demand for infrastructure in the country, largely arising from capital relocation and economic development. The country has a plan to relocate its capital city from the sinking and overcrowded Jakarta to Nusantara on Borneo Island. This has boosted the growth potential of the construction market in Indonesia. The capital city is expected to cost around US$32 billion and is projected to be complete in 2045.

Daewoo Engineering & Construction first entered the Indonesian market in 2020, when it secured a US$50 million deal to handle piping tasks at the liquefied natural gas site managed by BP in the Tangguh gas field, located in West Papua province. Their role in the Tangguh expansion initiative involved setting up piping infrastructure for the construction of a third liquefaction unit.

The firm is actively seeking infrastructure projects that can draw financial support from the Korean government's official development assistance and engage in public-private partnerships that leverage funding from export credit agencies in South Korea. Furthermore, the firm is eyeing plant construction projects that demand advanced construction technology, where Daewoo Engineering & Construction believes it holds advantages over Indonesian construction firms.

The Indonesian residential construction market is projected to record steady growth over the medium term

Demand for residential units is rising modestly in the Indonesian market. In Q4 2023, the sales increased by 3.27% compared to the year before, according to Bank Indonesia. This has resulted in construction activities gaining momentum in the residential sector.

• According to a report from Colliers, the number of units finished has nearly quadrupled in amount in 2023, compared to 2022. This suggests that many projects, that had been postponed due to the COVID-19 pandemic in recent years, have now been finished.
• The demand for housing units is expected to remain strong in 2024 too. The introduction of several housing market stimulus measures will aid the demand in the Indonesian market. The Omnibus Law, for instance, introduced two measures aimed at enticing foreign investors. First, it made it easier for them to qualify for property purchases. Second, it upgraded the type of property titles that foreigners could possess, shifting from the previously restricted "Right to Use" to the more flexible "Right to Build."

The Ministry of Finance, in 2023, released regulation PMK 120/2023, which extends the value-added tax (VAT) incentive program. This program offers a VAT subsidy for all residential properties priced at up to IDR 5 billion. Until June 2024, the subsidy is 11%, and from June to December 2024, it's 5.5%. Currently, there are 10,581 units eligible for this incentive. Furthermore, the relaxation of the loan-to-value (LTV) ratio policy remains in place until the end of 2024. On the demand side, the reintroduction of the VAT initiative is expected to drive sales performance in 2024.

This market intelligence report provides a detailed view of market opportunities in the building and infrastructure construction industry at country level. With over 100+ KPIs, covering growth dynamics in building construction, infrastructure construction, construction cost structure analysis and analysis by key cities in Indonesia, this databook offering primarily provides data-centric analysis with charts and tables.

Market Data and Insights:

This report provides market size and forecast across 40+ construction segments for a period of 10 years from 2019 - 2028 in Indonesia.

KPIs covered include the following:

• Market size by value
• Market size by volume of construction
• Number of units

Indonesia Economic Indicators

Indonesia Top Cities Construction Data

Indonesia Residential Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by

• Housing type
• Key cities
• Price point/income level
• Construction stage

Indonesia Residential Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by

• Green building by Housing type
• Green building by Key cities
• Green building by Price point/income level

Indonesia Commercial Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by

• Office
• Retail
• Hospitality
• Restaurant
• Entertainment
• Sports facility
• Other commercial building construction
• Construction stage

Indonesia Commercial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by

• Office green building construction
• Retail green building construction
• Hospitality green building construction
• Restaurant green building construction
• Entertainment green building construction
• Sports facility green building construction
• Other commercial green building construction

Indonesia Industrial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units)

• Manufacturing Plants building construction
• Chemical & Pharmaceutical building construction
• Metal & Material Processing building construction
• Construction stage

Indonesia Institutional Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by

• Healthcare construction
• Educational construction
• Other building construction
• Construction stage

Indonesia Institutional Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by

• Healthcare green building construction
• Educational green building construction

Indonesia Infrastructure Construction Sectors: 10- year market size & forecast in value terms by

• Marine and inland water infrastructure
• Utility system construction
• Transportation infrastructure
• Construction stage

Indonesia Green Infrastructure Construction: 10- year market size & forecast in value terms

Indonesia Construction Cost Structure Analysis: 10- year market size & forecast in value terms

• Cost Analysis by Type (Material, Labour, Equipment, Others)
• By Material & Work Cost: It provides the cost outlook of material costs by type of materials used in construction (Cement, Steel, Sand, Aggregates, Bricks, Wood, Windows Glazing, Flooring, Plumbing, Electrical, Painting, Other Materials)
• By Labour Cost: It provides the cost outlook of labour costs (RCC Construction Work, Masonry and Plastering Work, Plumbing Work, Water Proofing Work, Carpentry Work, Electrical Work, Tile Fixing Work, CATV Antenna Points, Painting Work, Departmental Labour)
• By Type of Construction (New, Re-Development)
• By Material Cost: It provides the cost outlook of material costs by type of materials used in construction (Concreting Sand, Stone Aggregate, Ordinary Portland Cement, Reinforced Concrete (Grade 30 MPA), Reinforced Concrete (Grade 40 MPA), High Tensile Steel bars, Mild Steel Round Bars, Structural Steelwork, Plywood Formwork (1800*900*12mm), Clay Bricks)
• Type of Labour (Skilled Vs Unskilled)

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