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 Nusantara Capital City (IKN) and the Sarawak Government of Malaysia has met to discuss opportunities for collaboration in various sectors. The meeting took place at the IKN Authority Office on Dec. 10, 2025. It was a strategic opportunity to explore potential cross-sector cooperation and investment, ranging from transportation, education, health, and culture.
The Sarawak Government is also preparing to authorize direct flight routes to several areas in Kalimantan Island, including the IKN. The route will be operated by AirBorneo, Sarawak's newly-founded state-owned regional airline. The opening of the route is expected to strengthen the flight network in Kalimantan and support the operation of the Nusantara International Airport.
"We are on the same island of Kalimantan. [Thus,] we are very interested in the development of Nusantara. As fellow territories in Kalimantan, we would also be proud if the whole world will eventually come to Nusantara," said Sarawak Minister of Transport Lee Kim Shin in a written statement on Dec. 11, 2025.
Lee also touched on his plan to develop a transnational railway line connecting various territories in Kalimantan Island.
"In addition to air transportation, we are also reviewing the development of a railway line connecting three countries: Indonesia, Malaysia, and Brunei Darussalam," he explained.
IKN Secretary Bimo Adi Nursanthyasto, welcomed the plan. He also highlighted the importance of improving regional connectivity.
"The Nusantara [International] Airport will soon be operational as a commercial airport. This will facilitate mobility to and from the capital city. If the transnational railway line is realized, it will also stimulate the Southeast Asian economy and demonstrate the strong economic dynamics of the region to the world," he stated.
For collaboration in the healthcare sector, Sarawak, which boasts great healthcare facilities, is open to collaboration with hospitals in the IKN, including in medical research, which could mutually strengthen service capacity. For the cultural sector, Sarawak and the IKN, with their shared cultural roots, see opportunities for developing joint cultural exchange programs and events in the future, such as a potential chopstick competitions.
