Indonesia Commercial Construction Market Size

Indonesia Commercial Construction Market Analysis

The Indonesia Commercial Construction Market size is estimated at USD 30.99 billion in 2024, and is expected to reach USD 45.64 billion by 2029, growing at a CAGR of 8.05% during the forecast period (2024-2029).

• Indonesia's Construction sector is expected to grow at a rapid pace over the forecast period, not being affected much, except short term disruption due to the Coronavirus outbreak. Upgrade of commercial infrastructure is anticipated, after retention of the position by the Joko Widodo as the president, and increasing cross border investments as part of the Belt and Road Initiative (BRI) from China, implementation of the 2030 Sustainable development Goals, Indonesia's Infrastructure plan and the increasing demographic interest towards modern commercial built environment, though, short term hefty losses worth several trillion USD, might result due to the regulation of cross border traffic from China to prevent spread of the novel COVID-19.
• By 2045, it is predicted that Indonesia would be a high-income nation with the fifth-largest GDP worldwide. As long as the nation maintains political stability, its rapidly urbanising population will continue to boost demand in the building sector.
• Overall, Indonesia's construction industry continues to be in good shape, with robust development prospects underpinned by low inflation, political stability, a high credit rating, and responsible macroeconomic policies. Investors are urged to look for local partners who have experience and a strong network so they can gain an advantage in Indonesia's fiercely competitive building market.
• The National Medium-Term Development Plan, 202-24, has prime focus on the development of infrastructure across the country and commercial construction is set to rise further as a part of the plan and the increasing public as well as private investments. But, increasing the skill set as per the state-of -the art technologies are a challenge for the small-scale private competitors as state owned enterprises are getting the desired funding and development opportunities. This has made finding private partner in the PPP models challenging due to unhealthy competition thriving.
• Investments worth 400 Billion USD have been floated into the infrastructure pipeline, as against a similar 350 Billion USD in the previous infrastructure plan by the Joko Government. Keeping in mind the low rank in terms of infrastructure in the WEF Global Competitiveness Index, 2019 (50th), this investment reflects the intent of the Govt to elevate the infrastructure setup in the country.