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 lack of a justification for President Prabowo Subianto 's cabinet reshuffle has raised more questions than answers. The effectiveness of the reshuffle is questionable since two key positions, the coordinating political and security affairs minister and the youth and sports minister, remain unfilled.
The changes saw the creation of a new Haj and Umrah Ministry, led by Mochamad Irfan Yusuf from Nahdlatul Ulama and his deputy Dahnil Anzar Simanjuntak from the Gerindra party.
The new ministry was formed after the passage of the Haj Law, which elevated the Haj Organizing Agency to ministerial status.
The reshuffle also altered the political balance within the cabinet. The National Awakening Party (PKB), a minority ally in the ruling coalition, gave up a seat when Abdul Kadir Karding was removed from his post as migrant workers protection minister. Golkar politician Mukhtarudin replaced him in the role.
Golkar, the second-largest party in the House of Representatives, also lost a cabinet seat when Prabowo dismissed Dito Ariotedjo as youth affairs and sports minister.
Meanwhile, Budi Arie was replaced as cooperatives minister by his deputy, Ferry Juliantono, a Gerindra politician.
Budi Arie faced pressure to resign as a result of two primary accusations. He allegedly allowed online gambling during his time as the then communications and information minister, and he failed to provide a viable business model for Prabowo’s flagship rural Red and White Cooperatives program.
Like Dito, Budi Gunawan was dismissed as coordinating political and security affairs minister without a successor.
Budi has ties to the Indonesian Democratic Party of Struggle (PDI-P) leader Megawati Soekarnoputri, who recently pledged support for the government, albeit without seeking cabinet representation.
Prabowo has not chosen a replacement for Budi, but instructed Defense Minister Sjafrie Sjamsoeddin to take over as interim minister.
The President is also reportedly vetting several names who will replace Dito. Among the potential candidates include Golkar politician Puteri Anetta Komarudin, a Commission XI member and daughter of former House speaker Ade Komarudin.
The reshuffle also saw Purbaya Yudhi Sadewa, the former chair of the supervisory council of the Indonesian Deposit Insurance Corporation (LPS), replace Sri Mulyani Indrawati as finance minister. Purbaya was not widely rumored for the position, and Prabowo's nephew, Deputy Finance Minister Thomas Djiwandono, was passed over for the role.
Sri Mulyani, who had served for 14 years across three presidencies, was replaced amid speculation about her resignation, which increased after her home in Bintaro, South Tangerang, was looted during recent riots.
With no substantial explanation from the President regarding the cabinet shake-up, the public has been left to speculate on the motives behind it.
Some analysts interpret the moves as an effort to reduce the influence of former president Joko “Jokowi” Widodo's allies, such as Budi Arie.
However, several prominent Jokowi-era officials remain in their posts.
Others have speculated that the recent riots in major cities may have contributed to Budi’s dismissal.
As Prabowo approaches his first year in office, the public anticipates further cabinet changes as he seeks to consolidate power and evaluate ministerial performance.
