Indonesia Construction Industry Databook Report 2024: Output to Grow by 6.4% this Year Driven by Government Investments, Urbanization, and Focus on Sustainability - Forecasts to 2028 - ResearchAndMarkets.com

The "Indonesia Construction Industry Databook Series - Market Size & Forecast by Value and Volume (area and units), Q2 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.

Despite near-term challenges in certain construction sectors, Indonesia's construction industry is poised for significant growth. The industry is expected to grow steadily over the next four quarters, with the growth momentum continuing over the forecast period. A CAGR of 5.7% is projected during 2024-2028, with the country's construction output expected to reach IDR 2,775,195.3 billion by 2028, indicating substantial growth potential.

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

The construction industry in Indonesia is positioned for robust growth, driven by government investment, urbanization, and a focus on sustainability. While challenges such as labour shortages and rising material costs remain, the overall outlook is positive. By aligning strategies with government initiatives and market trends, stakeholders can successfully navigate the evolving landscape of Indonesia's construction industry.

The construction industry in Indonesia is entering a pivotal phase characterized by robust growth driven by government initiatives, urbanization, and foreign investment.

Residential Construction: Meeting Urban Demand

• Growth in Housing Demand: The residential construction sector is poised for significant growth, supported by the government's housing stimulus measures, including reintroducing VAT incentives for properties priced up to IDR 5 billion. This initiative is expected to drive demand for affordable housing, particularly in urban areas.
• Shift Towards Vertical Housing: As urbanization continues, there is a notable shift towards high-rise apartments and vertical housing solutions, especially in major cities like Jakarta. This trend is driven by land scarcity and increasing population density, prompting developers to focus on multi-family housing projects.

Commercial Construction: Adapting to Market Needs

• Investment in Retail and Office Spaces: The commercial construction sector is witnessing a resurgence, with increased investments in retail spaces, office buildings, and mixed-use developments. The recovery of consumer spending post-pandemic is driving demand for new shopping centers and commercial facilities.
• Emergence of Green Commercial Buildings: There is a growing emphasis on sustainable commercial buildings, with developers increasingly adopting green building certifications. This trend responds to regulatory pressures and consumer demand for environmentally friendly spaces.

Institutional Construction: Enhancing Public Services

• Increased Spending on Education and Healthcare: The institutional construction sector benefits from heightened government spending on educational and healthcare facilities. This investment aims to improve public services and address the needs of a growing population, with significant projects planned for schools and hospitals across the country.
• Focus on Disaster Resilience: Given Indonesia's vulnerability to natural disasters, there is a strong emphasis on building resilient infrastructure. New institutional projects are increasingly incorporating disaster-resistant designs to enhance safety and sustainability in public facilities.

Industrial Construction: Supporting Economic Growth

• Expansion of Manufacturing Facilities: The industrial construction sector is experiencing growth driven by increased demand for manufacturing and logistics facilities. The government's focus on enhancing local production capabilities and reducing reliance on imports fuels investments in this area.
• Investment in Renewable Energy Infrastructure: Significant investments are being made in renewable energy projects, particularly solar and wind energy. The state utility company PLN has announced plans to invest IDR 2.6 quadrillion (approximately USD 172 billion) to construct renewable power capacity, which will require extensive industrial construction efforts.

Infrastructure Construction: Building for the Future

• Major Infrastructure Projects Underway: Infrastructure construction remains a cornerstone of Indonesia's development strategy. Major projects such as the new capital city, Nusantara, are expected to cost around USD 32 billion and are projected for completion by 2045. This ambitious project aims to alleviate congestion in Jakarta and promote economic growth in other regions.
• Focus on Transportation and Connectivity: The government prioritizes transportation infrastructure, including roads, railways, and ports, to improve connectivity across the archipelago. Enhanced transportation networks support trade and economic activities, particularly in remote areas.
• Government Investment in Infrastructure: In 2024, the Indonesian government has allocated over IDR 423 trillion for infrastructure development, a significant increase from previous years. This investment aims to enhance connectivity and support economic growth, particularly in underdeveloped regions. In 2023 alone, the government spent nearly USD 30 billion on infrastructure projects, underscoring its commitment to improving national infrastructure.
• Focus on Sustainable Development: The government increasingly prioritizes sustainable construction practices, aiming to reduce greenhouse gas emissions and transition to renewable energy sources. By 2030, Indonesia plans to increase the share of renewables in its energy mix from 12% to 40%, necessitating substantial investments in construction related to renewable energy projects.

Scope

Market Data and Insights: This report provides market size and forecast across 40+ construction segments for ten 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 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)

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 (multi family, single family)
• Key cities (Tier - 1, Tier - 2, Tier - 3 segmentation)
• Price point/income level (luxury, mid-tier, affordable)
• Construction stage (new construction, re-development & maintenance)

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 (multi family, single family)
• Green building by Key cities (Tier - 1, Tier - 2, Tier - 3 segmentation)
• Green building by Price point/income level (luxury, mid-tier, affordable)

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

• Office (further broken down by Grade A, Grade B, and Grade C)
• Retail (further broken down by Grade A, Grade B, and Grade C)
• Hospitality (further broken down by Grade A, Grade B, and Grade C)
• Restaurant (further broken down by Grade A, Grade B, and Grade C)
• Entertainment
• Sports facility
• Other commercial building construction
• Construction stage (new construction, re-development & maintenance)

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 (new construction, re-development & maintenance)

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 (new construction, re-development & maintenance)

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 (oil and gas infrastructure, communication infrastructure, power infrastructure, water and sewer infrastructure)
• Transportation infrastructure (highway, street and bridge construction, railway construction, airport construction, and tunnel construction)
• Construction stage (new construction, re-development & maintenance)

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

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