Construction in Indonesia - Key Trends and Opportunities to 2024

The Indonesian construction industry had been growing at a relatively fast pace prior to the Coronavirus (Covid-19) crisis, with the industry registering growth of 5.8% in real terms in 2019, which was marginally down from growth of 6.1% in the previous year. Growth had been driven by investments on the national strategic projects, mainly in the transport infrastructure sector. In 2020, however, Large-Scale Social Restrictions (PSBB) imposed by the government to contain the spread of Covid-19 and the global travel restrictions have affected the availability of manpower and raw materials, thereby weighing on the Indonesian construction industry's growth in the first half of 2020. The construction industry declined by 5.4% year on year (YoY) in the second quarter, following growth of 2.9% in the previous quarter. GlobalData expects the industry to grow marginally by 0.5% in real terms this year. The industry will be affected by the delays in project implementation and the re-allocation of part of the government's budget towards its fight against Covid-19. The government re-allocated 20.4% of its 2020 budget - IDR24.5 trillion (US$1.7 billion) - to Covid-19 relief measures.

On a positive note, the industry's growth is expected to be supported by the government's focus on infrastructure development to revive the country's economy. In late September 2020, the Indonesian Parliament approved the IDR2.8 quadrillion (US$185.3 billion) draft budget for 2021. Of the total, it allocated IDR413.8 trillion (US$29 billion) towards infrastructure development, which will mainly focus on reviving the economy, providing basic services, and improving connectivity. However, a downside risk could arise from the general financing and land acquisition issues in implementing toll road projects, corruption and the surging Covid-19 infections in the country, which could translate into a weaker economy and lower tax revenue, thereby weighing on the government expenditure.

The government had a plan to begin infrastructure work related to the IDR468.4 trillion (US$33 billion) capital city relocation project in 2021, but in September 2020, the National Development Planning Agency (Bappenas) announced that the project has been formally put on hold due to the economic impact of the pandemic. Although construction has been temporarily suspended, the government will continue to move ahead with its planning, with infrastructure work expected to commence in 2022 or 2023. GlobalData expects the Indonesian construction industry to stabilize and record an annual average growth of 5.7% between 2021-2024, supported by infrastructure investments under the National Medium-Term Development Plan (2020-2024 RPJMN). The plan is to invest IDR6 quadrillion (US$412 billion) on the development of transport, industrial, energy and housing infrastructure projects over the next four years.

This report provides detailed market analysis, information, and insights into the Indonesian construction industry, including -

• The Indonesian construction industry's growth prospects by market, project type and construction activity
• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Indonesian construction industry
• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Scope

This report provides a comprehensive analysis of the construction industry in Indonesia. It provides -

• Historical (2015-2019) and forecast (2020-2024) valuations of the construction industry in Indonesia, featuring details of key growth drivers.
• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
• Listings of major projects, in addition to details of leading contractors and consultants

Reasons to Buy

• Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
• Assess market growth potential at a micro-level with over 600 time-series data forecasts.
• Understand the latest industry and market trends.
• Formulate and validate strategy using GlobalData's critical and actionable insight.
• Assess business risks, including cost, regulatory and competitive pressures.
• Evaluate competitive risk and success factors.

Table of Contents

Table of Contents

1 Executive Summary

2 Construction Industry: At-a-glance

3 Context

• 3.1 Economic Performance
• 3.2 Political Environment and Policy
• 3.3 Demographics
• 3.4 COVID-19 Status

4 Construction Outlook

• 4.1 All Construction
• 4.2 Commercial Construction
• 4.3 Industrial Construction
• 4.4 Infrastructure Construction
• 4.5 Energy and Utilities Construction
• 4.6 Institutional Construction
• 4.7 Residential Construction

5 Key Industry Participants

• 5.1 Contractors
• 5.2 Consultants

6 Construction Market Data

7 Appendix

• 7.1 What is this Report About?
• 7.2 Definitions
• 7.3 GlobalData Construction

List of Tables

List of Tables

• Table 1: Construction Industry Key Data
• Table 2: Indonesia, Key Economic Indicators
• Table 3: Indonesia, Commercial Construction Output by Project Type (Real % Change), 2015-2024
• Table 4: Indonesia, Top Commercial Construction Projects by Value
• Table 5: Indonesia, Industrial Construction Output by Project Type (Real % Change), 2015-2024
• Table 6: Indonesia, Top Industrial Construction Projects by Value
• Table 7: Indonesia, Infrastructure Construction Output by Project Type (Real % Change), 2015-2024
• Table 8: Indonesia, Top Infrastructure Construction Projects by Value
• Table 9: Indonesia, Energy and Utilities Construction Output by Project Type (Real % Change), 2015-2024
• Table 10: Indonesia, Top Energy and Utilities Construction Projects by Value
• Table 11: Indonesia, Institutional Construction Output by Project Type (Real % Change), 2015-2024
• Table 12: Indonesia, Top Institutional Construction Projects by Value
• Table 13: Indonesia, Residential Construction Output by Project Type (Real % Change), 2015-2024
• Table 14: Indonesia, Top Residential Construction Projects by Value
• Table 15: Indonesia, Key Contractors
• Table 16: Indonesia, Key Consultants
• Table 17: Indonesia, Construction Output Value (Real, US$ Billion)
• Table 18: Indonesia, Construction Output Value (Nominal, IDR Trillion)
• Table 19: GlobalData Construction Market Definitions

List of Figures

List of Figures

• Figure 1: South and South-East Asia, Construction Output (Real % Change), 2020
• Figure 2: Indonesia, Construction Projects Pipeline by Sector (US$ Billion)
• Figure 3: Indonesia, COVID-19 Confirmed Cases
• Figure 4: Indonesia, Construction Output Value (Real, US$ Billion, 2017 Prices and Exchange Rate), 2015-2024
• Figure 5: Indonesia, Construction Output Value, by Sector (Real, US$ Million), 2015-2024
• Figure 6: Indonesia, Construction Value-Add (IDR Trillion, 2010 Constant Prices)
• Figure 7: Indonesia, Construction Projects Momentum Index
• Figure 8: Indonesia, Commercial Construction Output by Project Type (Real, US$ Million), 2015-2024
• Figure 9: Indonesia, Commercial Construction Projects Pipeline, Value by Stage (US$ Million)
• Figure 10: Indonesia, Total Foreign Tourist Arrivals (in Thousands)
• Figure 11: Indonesia, Hotel Property Demand and Price Indices (% Change YoY)
• Figure 12: Indonesia, Accommodation and Food Service Activities Value-Add (IDR Trillion, 2010 Constant Prices)
• Figure 13: Indonesia, Real Retail Sales Index (2010=100)
• Figure 14: Indonesia, Industrial Construction Output by Project Type (Real, US$ Million), 2015-2024
• Figure 15: Indonesia, Industrial Construction Projects Pipeline, Value by Stage (US$ Million)
• Figure 16: Indonesia, Manufacturing Value-Add (IDR Trillion, 2010 Constant Prices)
• Figure 17: Indonesia, Bank Indonesia Prompt Manufacturing Index (PMI-BI)
• Figure 18: Indonesia, Total Export Value (US$ Billion)
• Figure 19: Indonesia, Infrastructure Construction Output by Project Type (Real, US$ Million), 2015-2024
• Figure 20: Indonesia, Infrastructure Construction Projects Pipeline, Value by Stage (US$ Million)
• Figure 21: Indonesia, Energy and Utilities Construction Output by Project Type (Real, US$ Million), 2015-2024
• Figure 22: Indonesia, Energy and Utilities Construction Projects Pipeline, Value by Stage (US$ Million)
• Figure 23: Indonesia, Institutional Construction Output by Project Type (Real, US$ Million), 2015-2024
• Figure 24: Indonesia, Institutional Construction Projects Pipeline, Value by Stage (US$ Million)
• Figure 25: Indonesia, Residential Construction Output by Project Type (Real, US$ Million), 2015-2024
• Figure 26: Indonesia, Residential Construction Projects Pipeline, Value by Stage (US$ Million)
• Figure 27: Indonesia, Real Estate Value-Add (IDR Trillion, 2010 Constant Prices)
• Figure 28: Indonesia, Residential Property Sales (% Change YoY)
• Figure 29: Indonesia, Residential Property Price Index (RPPI) (2002=100, % Change YoY)
• Figure 30: Indonesia, Headquarters of Key Contractors (% of Total Project Pipeline)
• Figure 31: Indonesia, Headquarters of Key Consultants (% of Total Project Pipeline)