PUBLISHER: GlobalData | PRODUCT CODE: 1123644
PUBLISHER: GlobalData | PRODUCT CODE: 1123644
GlobalData has revised down its projection of the growth of the Indonesian construction industry to 2%, from its prior projection of a 5.8% growth, owing to rising construction costs, higher energy prices, increasing inflation, and a tightening of monetary policy, all of which are expected to lead to a 3.6% decline in commercial construction and a 0.9% and 0.3% decline in institutional and residential construction sector respectively in 2022. However, the development of transportation and energy infrastructure projects will drive the growth of the industry's output this year. The government has committed IDR37.3 trillion ($2.6 billion) of investment for the Connectivity Infrastructure Program in the 2022 Budget, which includes IDR20.1 trillion ($1.4 billion) for road and bridge preservation, IDR5.5 trillion ($377.9 million) for road construction, IDR5.3 trillion ($364.2 million) for flyover and underpass construction, and IDR4.8 trillion ($329.8 million) for highway construction, among others. In addition, the total investment in Indonesia increased by 35.3% year on year (YoY) during the first nine months of 2022, totaling IDR892.4 trillion ($61.3 billion) and reaching 74.4% of the 2022 target of IDR1,200 trillion ($82.5 million).
Over the remainder of the forecast period, the Indonesian construction industry is expected to register an annual average growth of 4.9% from 2023 to 2026, supported by investment on transport, electricity, housing, and manufacturing projects. Previously, in 2021, the government announced its plan to relocate Indonesia's capital city away from Jakarta to Nusantara, with an investment of IDR494.8 trillion ($34 billion). Accordingly, with the signing of contracts for 19 project packages totaling IDR5.3 trillion ($364.2 million) in August 2022, the Public Works and Public Housing (PUPR) Ministry launched the first phase of basic infrastructure development of the new capital (IKN) Nusantara, East Kalimantan. Forecast-period growth will also be supported by investment as part of the 2020-24 National Medium-Term Development Plan (RPJMN) and the Electricity Procurement Plan (RUPTL) 2021-30
The report provides detailed market analysis, information and insights into the Indonesian construction industry, including -
This report provides a comprehensive analysis of the construction industry in Indonesia. It provides -