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 Riau Provincial Government works to accelerate infrastructure development through strategic collaboration, which include establishing communication with foreign investors. Riau Acting Regional Secretary Taufiq OH received a visit from Chinese construction company, Yunnan Construction and Investment Holding Group Co. Ltd., on Apr. 15, 2025.
The meeting, which took place at the Riau Governor's Residence in Pekanbaru City, Riau, discussed the potential for infrastructure development cooperation in the province.
"Today we have a [visit from] an investor from China, namely Yunnan Construction. The Governor has a vision to develop Riau, of which one way is to obtain investment funds. Hence, we have discussed [a potential investment with Yunnan Construction] today a found quite large potential [for investment]," said Taufiq.
He explained that the company has a strong track record in developing industrial areas, toll roads, and other infrastructure projects across various Southeast Asian countries.
"We already know the achievements of Yunnan Construction. They are widely involved in industrial areas and infrastructure development. This is the basis for us to consider them," Taufiq stated.
For the initial stage, the cooperation is planned to start from the development of the Buruk Bakul Industrial Area in Bengkalis Regency, Riau.
"We discussed the development plan for the Buruk Bakul Industrial Area. The potential does exist in the area [to become the site of a new industrial area] based on its suitability and local wisdom. It is possible that other ares [in the province] could also become [the sites for other industrial areas]," he added.
Taufiq emphasized that the meeting was the initial step that would be continued with follow-up meetings.
"So that we can follow up on the direction from the Governor so that there is investment development, and [the project's progress has the potential to] attract other investors to Riau Province," he concluded.
