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 Banten Province Investment and One-Stop Integrated Services Office (DPMPTSP) and Bank Indonesia Representative Office for Banten Province held the "Banten Investment Forum 2024" event in the Gading Serpong area of Tangerang on Oct. 29, 2024.
The event, which had "Investment To Enhance Inclusive and Sustainable Economic Growth" as its theme, was opened by Investment and Downstream Ministry/Investment Coordinating Board (BKPM) Investment Promotion Deputy Nurul Ichwan. Also attending were BI Banten Head Ameriza Ma'ruf Moesa, Banten DPMPTSP Head Virgojanti, heads of local administrations in Banten Province, business actors and banks, as well as students and other related elements.
Banten DPMPTSP Head Virgojanti said that the event was expected to be a forum that brought business actors, prospective investors, banks, as well as local governments and the community together. The Banten DPMPTSP also wants to get input related to investment opportunities that can be done in Banten Province from observers and economic actors through the forum.
"Or maybe there are things that need to be recommended in order to improve the investment services provided by ourselves as part of the Banten Provincial Government," she added.
The forum's talk shows on investment opportunities and future economic challenges include Bank Permata (PermataBank) Chief Economist Joshua Pardede, BI Banten Head Ameriza Ma'ruf Moesa, and other speakers from the National Development Planning Agency (Bappenas), the Energy and Mineral Resources Ministry, BI, and PLN's Banten Province Central Distribution Unit.
An award ceremony was also held as a form of appreciation for the performance of the Banten's regency and city governments that have jointly encouraged growth and ease of investment in Banten Province.
"Investment realization will not be achieved without our cooperation and collaboration," Virgojanti said.
Appreciation was also given to business actors that has performed well on matters such as providing reports on the implementation of business partnerships.
"Today, we are also launching an investment brand in Banten, namely 'Banten Gold'," Virgojanti revealed.
She said that the Banten Gold brand was created based on various inputs from several groups for a strong identity to attract investments that is also not "narcissistic."
In addition, there was also a presentation for development and investment opportunities in the Tanjung Lesung Special Economic Zone (KEK), the Pantai Indah Kapuk National Strategic Project (PSN), and Bumi Serpong Damai (BSD).
The handover of business registration numbers (NIB) to MSMEs was also carried out at the forum, as well as meetings and in-depth discussions for investors. The forum also saw the signing of memorandums of understandings (MoU) for business partnerships between large entrepreneurs and several MSMEs in Banten.
Virgoyanti also conveyed the written statement of Acting Banten Governor Al Muktabar, who emphasized the importance of investment in efforts to develop Banten's economy, raise employment, improve community welfare, and eradicate poverty.
"We express our gratitude and appreciation to investors and prospective investors for choosing Banten Province as a place to invest and develop their businesses, which of course in turn will provide a positive contribution that becomes a very important factor in regional development," he stated.
Al Muktabar hoped that synergy will be built between the central government, local governments, business actors or investors, and the community through the forum so a conducive investment climate could be achieved in Banten.
"So that it (the synergy) could encourage the creation of quality investment that can play a role in reducing poverty, raise the [local] economic growth rate, and significantly increase employment," said Al Muktabar.
Meanwhile, Investment and Downstream Ministry/Investment Coordinating Board (BKPM) Investment Promotion Deputy Nurul Ichwan emphasized that all investment stakeholders must follow the new norms established by the United Nations' Sustainable Development Goals (SDG), which for business actors is expressed as environmental, social, and governance principles.
"We cannot exclude ourselves from following those norms," he stated.
