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
Property multinational company Marriott International plans to build a Marriott hotel in Merauke Regency, South Papua Province. The hotel development plan was discussed in a meeting chaired by South Papua Governor Apolo Safanpo at his office on June 23, 2025. The meeting was also attended by South Papua Province Papuan Regional Legislative Council (DPRP) representatives, PT Puri Abadi Indonesia as the project's developer, and the project planning consultant.
Apolo stated that the planned entry of the world-renowned hotel chain is a solution for the currently limited space and accommodation capacity of space and accommodation capacity in Merauke Regency. He elaborated that the province's already high hotel occupancy rate as well as the high frequency of activities and visits from central government bodies have raised the urgency for additional facilities.
"The Marriott Hote's construction will begin next month (July 2025), and is targeted to open early next year," Apolo revealed.
In addition, the Marriott Hotel's planned construction is also seen as a strategic move to enhance Merauke Regency's image and competitiveness as a growth center in South Papua. The hotel hotel is expected to become an alternative location for various large-scale events in addition to the existing Swiss-Belhotel location.
Furthermore, the Marriott Hotel's construction is expected to have a direct impact on the community, especially in terms of employment.
"This will create many job opportunities. We encourage the majority of workers to be Merauke residents, so that the economic benefits directly benefit the local community," Apolo emphasized.
During the meeting, the governor also instructed the project planning consultant to integrate cultural ornaments and distinctive features of traditional houses from cultures of four regencies in South Papua into the hotel's architectural design. He believes it is crucial for local identity to be strongly represented in strategic infrastructure development.
"South Papuan motifs, architecture, and identity must be part of the hotel's image. This is not just about business, but also about local pride and identity," he noted.
The plan to build the Marriott Hotel is part of the regional government's strategic steps to develop the local tourism sector, support government activities, and accelerate regional economic growth through investment in the services sector and the hospitality industry.
