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
Kotabaru Regent Muhammad Rusli has signed the agreement for continuing theconstruction of the Laut Island Bridge with the Tanah Bumbu Regency Government and the South Kalimantan Provincial Government at the South Kalimantan Provincial Public Works and Spatial Planning Agency building in Banjarbaru City, South Kalimantan.
South Kalimantan Governor Muhidin emphasized that the construction of the Laut Island-Batulicin Bridge is a physical project that is a major step in driving new economic growth in South Kalimantan. The signing of the multi-year continuation contract was witnessed by Muhidin, Rusli, and Tanah Bumbu Regent Andi Rudi Latif.
Through a multi-year construction system, this project is designed to ensure continuity of construction until completion in line with its high investment value and construction complexity.
"We are sharing the investment value. The Kotabaru Regency Government and Tanah Bumbu Regency Government are each allocating Rp 100 billion, while the South Kalimantan Provincial Government is allocating Rp 550 billion per year. The total annual investment is Rp 750 billion for the construction of the [bridge's] peripheral sections. The central section will be carried out by the Public Works Ministry at Rp 3 trillion," Muhidin explained.
The South Kalimantan goveror emphasized the importance of regional government participation in oversight to ensure the Laut Island Bridge construction project would be completed on time and meets quality standards. The bridge is expected to become a gateway for regional connectivity and boost leading sectors such as trade, logistics, fisheries, and tourism.
