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
The presence of the Indonesia Morowali Industrial Park (IMIP) Private Airport in Morowali Regency, Central Sulawesi, has sparked controversy after Defense Minister Sjafrie Sjamsoeddin asserted that the facility operates without proper state oversight. The issue appears to reflect a broader debate among state institutions, revealing friction between figures from the previous administration and the current government.
Sjafrie issued a stern warning regarding the private airport, emphasizing that the government would not allow the industrial zone to operate as a "state within a state".
He made this statement after attending the Joint Command Exercise of the Indonesian Military (TNI) at the IMIP area on Nov. 19–20. He stressed that the government intends to overhaul the management of the airport to ensure full state compliance.
President Prabowo Subianto has named Sjafrie the head of the Forest Area Regulation Task Force, whose mandate is to restore forest areas impacted by unauthorized mining and plantations. Any land occupied by companies operating illegally within forest zones is to be reclaimed by the state.
Amid this enforcement effort, IMIP has drawn scrutiny for its reputation as an exclusive enclave, often inaccessible even to residents. Green groups have also linked the industrial estate to the severe environmental degradation and health problems in the regency.
PT IMIP operates the industrial park, which spans approximately 2,000 hectares. The area hosts more than 50 companies, primarily ferronickel processors. Since its establishment in 2013, three entities have been listed as shareholders: Shanghai Decent Investment (Group), PT Sulawesi Mining Investment and PT Bintang Delapan Investama.
The IMIP Private Airport, developed to support this Chinese-backed industrial estate, has long been suspected of serving as a discreet entry point for foreign workers employed in Morowali's mining operations.
Technically, the airport received operational approval during the administration of president Joko "Jokowi" Widodo, alongside the rapid development of nickel-processing operations in the region.
Former coordinating maritime affairs and investment minister Luhut Binsar Pandjaitan defended the airport, stating its presence is reasonable given that Chinese investors have injected US$20 billion into the area. He stressed that the airport is designated solely for domestic flights and, therefore, does not require customs or immigration services under prevailing regulations.
The friction highlights a clash of titans: both Luhut and Sjafrie are former Army generals. Luhut is a known loyalist of former president Jokowi, while Sjafrie is closely aligned with Prabowo.
According to reports compiled by AirNav Indonesia and the Transportation Ministry, the IMIP Airport has never served international flights, and its operations remain compliant with existing regulations.
Notably, this report was co-prepared by the Indonesian Air Force, an institution under Sjafrie's supervision. This suggests that data contradicting the minister's concerns was available within his own sphere of influence prior to his public critique.
Deputy Transportation Minister Suntana has also affirmed that the airport is legally recognized and holds a valid operational permit.
However, the situation is complicated by a bureaucratic flip-flop. The Transportation Ministry temporarily granted the airport permission to operate direct international flights via Transportation Minister Decree No. KM 38/2025 on Aug. 8. This approval was revoked shortly after by Decree No. KM 55/2025 on Oct. 13, yet the revocation was only publicized recently after the controversy erupted.
This sequence has raised questions, if IMIP Private Airport was intended solely for domestic operations, why was it ever granted international flight authorization, however briefly?
The temporary permit drew sharp criticism from Central Sulawesi Governor Anwar Hafid, who argued that private airports should not be eligible for international status. He reiterated that Mutiara Sis Al Jufri Airport in Palu City is the province's only designated international gateway.
Anwar further noted that oversight authority for the IMIP airport lies exclusively with the Transportation Ministry, making it difficult for regional authorities to monitor activities on the ground.
Despite the confusion, the Transportation Ministry maintains that between Aug. 8 and Oct. 13, the IMIP Private Airport did not serve any international flights.
