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

May 7, 2026

Domestic workers work long hours and do all kind of chores for low wages and have little or no legal recourse in case of harassment or abuse, as they are completely at the mercy of their employers, or “masters” in this system of modern slavery that persists in Indonesia.

At least, that was until the House of Representatives passed the Law on Domestic Workers Protection (UU PPRT) on April 21. Among the rights and protections it guarantees, millions of domestic workers, mostly women, will gain legal status and recognition for the first time.

The Domestic Workers Protection Bill had lingered at the House for more than 22 years, indicative of a lack of enthusiasm and sense of urgency, not only on the part of legislators but also the general public. President Prabowo Subianto, in his Labor Day address last year, promised the bill would be passed within three months.

The House missed that deadline but enacted the law in time for May Day 2026 with little fanfare, to judge by the scant attention mainstream media gave the milestone legislation. Nevertheless, the new law could impact the way millions of families across the country treat their servants. And therein lies the rub.

While the law lists the various rights and obligations that must be met by all stakeholders, employers, workers and related businesses such as home cleaning services, it falls short on details related to enforcement and more importantly, oversight.

For example, the law mandates a formal employment agreement that outlines the employee’s rights and the employer’s obligations. But any negotiation between the two sides would involve an unequal power relationship and most likely result in an unfair contract for the domestic worker.

Furthermore, the law merely stipulates entitlements such as “decent wages”, “humane working hours”, “breaks and days off” and “holidays” to be determined by mutual agreement and does not set a legal framework.

It does, however, stipulate a minimum age of 18 as well as the provision of health, social and employee insurance for domestic workers. If employers register their servants for such coverage, and that is a big if, the government will contribute a share of the premium and provide social assistance.

The new law does not set a minimum wage or maximum working hours, which would be expected in a labor law.

Though it offers some protection for domestic workers, the new law also protects the interests of domestic employers. Oversight is a critical issue, and the legislation does not make clear who is responsible for contractual enforcement, provided that one is signed, or how violations will be dealt with.

Lita Anggraini, coordinator of the National Advocacy Network for Domestic Workers (Jala PRT), welcomes the new legislation but says it only covers 75 percent of the obligations covered in Convention No. 189 of the International Labor Organization.

The treaty guarantees domestic workers the same basic rights as all other employees and sets standards for fair working conditions, including reasonable working hours, weekly rest and protection from employer abuse.

Jala PRT said it received 1,184 reports on violence against domestic workers, including 26 cases of sexual violence in 2025, though it noted that many more cases of violence went unreported.

Domestic workers are typically tasked with cleaning, washing clothes, cooking, babysitting and accompanying children to and from school. In the absence of legal protection, it is not uncommon for them to be subjected to bullying, harassment and worse at the hands of employers or their family members. The way domestic workers in Indonesia are treated, with long hours, meager pay and harsh working conditions, sometimes involving abuse, their employers would be liable under antislavery laws in Western countries. But no one in Indonesia is talking about phasing out these jobs or introducing antislavery legislation.

The ILO estimates that as many as 5 million Indonesians, mostly women, are employed in domestic service. Millions also work in this sector abroad, including in Hong Kong, Malaysia, Saudi Arabia, Singapore and Taiwan. In fact, the Indonesian government has insisted on overseas employers signing contracts with specific salaries and working hours as well as legal protections in some of these countries.

Ironically, many civil society organizations that are actively demanding protections for Indonesian migrant workers abroad are less passionate about or simply turning a blind eye to legal protections for domestic workers at home.

The Domestic Workers Protection Law promises to improve the lot of domestic workers but not much beyond legal recognition. Urban Indonesians need housemaids, and want them cheap.

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