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.
View moreOther Sectors
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
A total of 15 investors have signed letters of intent (LoIs) to invest in various strategic projects in Lampung Province.
"Lampung Province is ready to become a hub for the downstream industry development of five strategic regional commodities, namely coconut, coffee, pepper, cassava, and shrimp. Therefore, efforts are being made to attract investors to Lampung," said Lampung Governor Rahmat Mirzani Djausal in Bandar Lampung City, Lampung.
He noted that the 2025 Lampung Economic and Investment Forum (LEIF) attracted dozens of foreign investors and achieved significant milestones with the signing of 15 LoIs for various strategic regional projects.
"The event, held in conjunction with the Lampung Investment Forum (FOILA), was a strategic platform to promote regional investment potential and strengthen the downstream industry development of leading commodities, while also promoting Lampung as a new national investment draw," Rahmat said.
He explained that the presence of investors from Japan, Belgium, the Philippines, Malaysia, and China demonstrated growing international confidence in Lampung's economic potential.
"With a gross domestic product (GDP) of Rp 483.8 trillion in 2024, Lampung was ranked fourth highest in Sumatra. This has also opened up significant opportunities for investment in the food, renewable energy, and sustainable tourism sectors," Rahmat added.
He stated that Lampung's economic development is now focused on increasing added value by strengthening regional manufacturing. The downstream industry development policy is a key step to ensure Lampung becomes not just a producer of raw materials, but also a center for high-value production.
"LEIF 2025 also features an exhibition of regional investment projects and one-on-one meetings between potential investors and project owners. This forum provides an interactive space to discuss collaboration opportunities, financing schemes, and investment models in priority sectors," Rahmat elaborated.
The Lampung Provincial Government offered 11 flagship projects with a total investment value of more than Rp 22 trillion at the forum. These projects include, among others, the Bakauheni Port City worth Rp 4.5 trillion, the Way Kanan Industrial Park worth Rp 3.5 trillion, the Port of Sebalang expansion worth Rp 3 trillion, and a floating solar power plant (SPP) worth Rp 2.1 trillion, the Kemiling Agripark Development Plan worth Rp 1.2 trillion, the New City Area worth Rp 1.7 trillion, the Subing Betan Terminal and double-track railway worth a combined Rp 2.4 trillion, the Gunung Tiga geothermal power plant worth Rp 1.8 trillion.
The investors and related parties who signed the investment agreement documents in Lampung Province include Nippon KOEI, PT Kobelco Trading Indonesia, the Embassy of the Kingdom of Belgium to Indonesia for the double-track railway project. Meanwhile, PT Tanyoe Sentosa, PT Bakrie Power, Xurya Daya, and PT Magical Crystal Indo will collaborate for the floating SPP project. Both PT Tanyoe Sentosa and PT Sinohydro Corp will carry out the New City Area project.
There is also PT Mitsui Indonesia for the Subing Betan Terminal project, Norwin Mark Castro from the Philippines for the Bakauheni Port City project, PT Bukit Kiara Lestari for the Port of Sebalang expansion project, and Azwan Omar from Malaysia for the Kemiling Agripark project.
