Construction in Indonesia – Key Trends, Forecast and Opportunities to 2021

Albany, US, 2017-Jul-05 — /EPR Network/ — Market Research Hub includes new market research report “Construction in Indonesia – Key Trends and Opportunities to 2021” to its huge collection of research reports.

Indonesia’s construction will continue to thrive over the forecast period (20172021), driven by investment in infrastructure, energy and residential projects. The construction industry’s output grew by 6.2% in 2016 in real terms, following an average annual growth of 6.6% during the preceding four years.

Growth was supported by favorable demographics, and public and private sector investment in infrastructure and residential construction projects, leading to an increase in demand for the construction industry. Government investments under the National Medium Term Development Plan 20102014 to develop the country’s infrastructure also supported growth during the review period. 

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Focus on the development of transport infrastructure and the construction of affordable housing units will be key growth drivers during the forecast period. Industry growth will also be supported by the Development Program 20152019, under which the government aims to develop the countrys transport infrastructure.

The industrys output value in real terms is expected to record a compound annual growth rate (CAGR) of 7.68% over the forecast period, compared to 6.49% during the review period (20122016).

Despite government support for infrastructure development and the countrys favorable demographics, the Indonesian construction industry is expected to face challenges over the forecast period. Notably, limited funding, land acquisition problems, project delays and political corruption are expected to limit growth potential during the early part of the forecast period.

Timetrics Construction in Indonesia Key Trends and Opportunities to 2021 report provides detailed market analysis, information and insights into the Indonesian construction industry, including:

The Indonesian construction industry’s growth prospects by market, project type and construction activity

Analysis of equipment, material and service costs for each project type in Indonesia

Critical insight into the impact of industry trends and issues, and the risks and opportunities they present to participants in the Indonesian construction industry

Profiles of the leading operators in the Indonesian construction industry

This report provides a comprehensive analysis of the construction industry in Indonesia. It provides:

Historical (2012-2016) and forecast (2017-2021) valuations of the construction industry in Indonesia using construction output and value-add methods

Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by project type

Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)

Analysis of key construction industry issues, including regulation, cost management, funding and pricing

Detailed profiles of the leading construction companies in Indonesia

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Identify and evaluate market opportunities using Timetric’s standardized valuation and forecasting methodologies.Assess market growth potential at a micro-level with over 600 time-series data forecasts.Understand the latest industry and market trends.

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Assess business risks, including cost, regulatory and competitive pressures.

Evaluate competitive risk and success factors.

Key Highlights
Government focus on the development of the country’s infrastructure ahead of the 2018 Asian Games is expected to support growth in the Indonesian construction industry over the forecast period. Accordingly, under the National Medium-Term Development Plan (RPJMN) 20152019, IDR4.8 quadrillion (US$360.6 billion) will be invested in the country’s infrastructure projects in the 20152019 period.

To improve the country’s infrastructure, reduce logistics costs and enhance connectivity in Southeast Asia’s largest economy, the government is focused more on the expansion of the countrys rail, road, harbors, airports and other core transport infrastructure. Accordingly, in its 2017 budget, the government increased expenditure on infrastructure development by 22.1%, going from IDR317.1 trillion (US$24.0 billion) in the 2016 budget to IDR387.3 trillion (US$29.3 billion) in the 2017 budget.

According to Bank Indonesia, the quarterly average Residential Property Prices Index (RPPI) for 16 cities grew by 3.2%, going from 187.4 in 2015 to 193.4 in 2016. The REPI of small houses rose by 4.3%, going from 208.8 in 2015 to 217.8 in 2016, while that of medium houses rose by 3.4%, going from 185.3 to 191.6, and large houses rose by 1.8%, going from 166.3 to 169.2 during the same period.

Government efforts to balance supply and demand for energy are expected to support growth in the energy and utilities construction market over the forecast period. Demand for electricity is projected to increase due to industrialization, urbanization and population growth. Accordingly, in June 2016, the Ministry of Energy and Mineral Resources approved Rencana Umum Penyediaan Tenaga Listrik (RUPTL) 20162025, a ten-year electricity supply business plan.

Housing supply in Indonesia is low compared to demand, which provides opportunities for residential developers. Consequently, the government is focusing on affordable housing in order to address the countrys chronic housing shortage. Accordingly, the government launched a five-year One Million Houses Program in mid-2015. 

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