Indonesia Construction Market Size

Indonesia Construction Market Analysis

The Indonesia Construction Market size is estimated at USD 284.17 billion in 2024, and is expected to reach USD 407.87 billion by 2029, growing at a CAGR of 7.5% during the forecast period (2024-2029).

• While market experts continued to expect a broad recovery in Indonesia's infrastructure sector from 2022, the resurgence in COVID-19 cases in recent months and corresponding movement restrictions caused some operational disruptions. However, the impact was not as severe as in 2020 or in some other industries, as construction was still classified as an essential activity and was allowed to continue. The industry was impacted by delays in project implementation and the re-allocation of part of the government's budget toward COVID-19. The government re-allocated 20.4% of its 2020 budget (USD 1.7 billion) to COVID-19 relief measures.
• The construction value for building projects was estimated to reach IDR 157.47 trillion (USD 10.97 billion) in 2022, driven by growth in the housing and industrial sectors. Trends in other categories, such as hotel, retail, and office, started to show positive growth compared to 2021, which was expected to boost the construction market in the coming years. In the residential market, the market size of apartments was expected to increase, while landed houses were projected to decrease slightly compared to 2021. Overall, the market size of landed houses was larger than that of apartments. The houses were dominated by the Greater Jakarta area, with suburbs in Bekasi, Bogor, and Tangerang as the dominant areas.
• Meanwhile, apartments were dominated in DKI Jakarta Province. These findings indicated that landed houses continued the development trend in the suburbs, and apartments started to move toward recovery. The retail category trend was expected to grow in 2022. The construction of shopping centers was expected to increase slightly. Shophouses and retail outlets were projected to continue the upward trend in 2022. Retail was estimated to reach IDR 17.17 trillion (USD 1.19 billion) in 2022.
• Office projects also showed an increasing trend, although slightly. Thus, the total construction projects in 2022 were estimated to reach IDR 15.14 trillion (USD 1.05 billion). The development of data centers might have increased its share significantly in 2022, i.e., IDR 4.59 trillion (USD 32.02 million) of the total value of office construction. Indonesia was the second most productive and profitable construction market in Asia, where many construction projects were underway in residential and non-residential sectors.
• There is a huge demand for residential properties, and the property sector is growing in major cities across the country. The public works investment is a key point in the government’s plan to provide water resources, roads, and human settlement infrastructure for long-term development. Indonesia's receptive stance toward China's Belt and Road Initiative (BRI) will be a boon to its construction industry over the next decade and help sustain the current rapid pace of development. Private and foreign capital is crucial in bridging the country's widening infrastructure gap.