Sector
Construction
As of 2022, Indonesia’s population stands at 275.8 million, a 1.17 percent growth from 272.7 million in 2021. With such a large population, Indonesia exhibits an exceptionally high demand for construction services. The total value of completed construction work in 2022 reached US$98.3 billion, with US$56.26 billion attributed to civil construction, US$32.87 billion to building construction, and the remaining US$9.17 billion to special construction work.
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Construction
As of 2022, Indonesia’s population stands at 275.8 million, a 1.17 percent growth from 272.7 million in 2021. With such a large population, Indonesia exhibits an exceptionally high demand for construction services. The total value of completed construction work in 2022 reached US$98.3 billion, with US$56.26 billion attributed to civil construction, US$32.87 billion to building construction, and the remaining US$9.17 billion to special construction work.
Subsequently, Indonesia’s construction sector has experienced accelerated growth. In 2023, its gross domestic product (GDP) reached US$133.7 billion with an annual growth rate of 4.91 percent – more than double the rate of 2022, which stood at 2.01 percent. The sector’s stable growth in 2023 is further reflected on a quarter-basis; from Q2 to Q3, the construction sector grew by 5.87 percent, and from Q3 to Q4, it grew by 5.84 percent.
The prospects of the construction sector are on the rise as the price of construction materials stabilized around 2023 following the end of the pandemic. Notably, the price index for the construction of public facilities, buildings, roads, and bridges recorded a 0.17 deflation from November to December 2023, leading to a slight deflation of 0.08 percent on the price index for construction.
The construction sector has also been seeing increasing interest from foreign investors. Throughout 2023, total foreign direct investment (FDI) that flowed into the sector reached US$281.8 million, a significant increase compared to the total FDI of US$165.3 million that the sector absorbed in 2022.
Meanwhile, the total number of construction businesses has been decreasing slightly over the years from a total of 197,030 businesses in 2022 to 190,677 businesses in 2023. Considering the rapid growth of the sector, this decrease in construction businesses is attributed more to mergers and acquisitions rather than the businesses’ ceasing operations. Additionally, it is worth noting that in 2023, the total number of Construction Labor Certificates (SKK) and registered construction expertise certificates (SKA) reached 261,720 and 38,328, respectively.
Latest News
Foreign investors from Malaysia and China are reportedly interested in investing Rp 62.3 trillion in total to Central Java Province. Central Java Governor Ahmad Luthfi revealed that foreign investors from the two countries had signed Letters of Intent (LoIs) for the investments.
"The total is Rp 62.3 trillion. [They include] around Rp 6.9 trillion from Malaysia and Rp 55.4 trillion from Fujian, China," Luthfi said in Semarang City, as quoted by Antara, on Nov. 29, 2025.
He explained that Fujian Province, China, and Central Java have had a 20-year working relationship as sister provinces. Fujian is committed to significant investments spanning various sectors that range from road construction, concrete and construction materials, automotive components, housing infrastructure, tableware, to renewable energy.
"They are attracted to Central Java because our workforce is competitive, our region is capital- and labor-intensive, and our investment climate is favorable. We have also simplified investment permitting," Luthfi elaborated.
In addition, the Central Java Provincial Government and Fujian will also collaborate in the education sector. In fact, an agreement has been reached between Central Java and the Chinese company Ruijie Network for scholarships and internships in information technology at vocational schools in Central Java. The collaboration, driven by the Central Java Province Education Office, aims to improve the quality of human resources, especially in the trades, in Central Java.
"We are preparing vocational schools to meet the need for skilled workers. We train what the industry needs," Luthfi noted.
He added that the Central Java Provincial Government is also committed to opening direct flights from Fujian to Semarang City, but the route's implementation is still hampered by the length of Gen. Ahmad Yani International Airport's runway. The initiative to extend the runway has been coordinated with the central government and airport state-owned enterprise (SOE) PT Angkasa Pura Indonesia (Injourney Airports).
Meanwhile, for naval routes, the Port of Tanjung Emas in Semarang City already has a direct route to Fujian with a frequency of one trip every two weeks. Nevertheless, port revitalization is still needed to optimize services, and the Central Java Provincial Government has written to the Transportation Ministry regarding the need.
On trade, Luthfi also mentioned the collaboration between the Asian Trade, Tourism, and Economic Council (ATTEC) and Asian business leaders to encourage increased investment in Central Java, driven by the Indonesian Chamber of Commerce and Industry (Kadin) and the Indonesian Young Entrepreneurs Association (HIPMI). He is optimistic that this collaboration will strengthen Central Java's position as a draw for investment.
Meanwhile, realized investments to Central Java from January to September 2025 reached Rp 66.13 trillion, or 84.42 percent of the annual investment target, Central Java Province Investment and One-Stop Integrated Services Office (DPMPTSP). The investments also created 326,462 jobs.
