Indonesia Construction Market Expands at CAGR of 7.1% to Touch Towering Value of USD 426 Billion by 2030

Published | 26 September 2024

Indonesia Construction Market is flourishing due to the rapid urbanization, infrastructure initiatives, and the government’s policies promoting affordable housing across the country.

BlueWeave Consulting, a leading strategic consulting and market research firm, in its recent study, estimated Indonesia Construction Market size by value at USD 268.54 billion in 2023. During the forecast period between 2024 and 2030, BlueWeave expects Indonesia Construction Market size to expand at a CAGR of 7.1% reaching a value of USD 425.92 billion by 2030. Construction Market in Indonesia is propelled by substantial government investments in infrastructure development projects, including roads, bridges, airports, seaports, and railways. These initiatives aim to enhance connectivity, reduce logistical costs, and stimulate economic growth. Foreign direct investments are also playing a significant role, with global companies collaborating with domestic firms on various projects. Furthermore, the Millennium Challenge Corporation's investment of USD 649 million is bolstering infrastructure financing and supporting small businesses. The rising population, urbanization, and growing middle class are driving demand for residential properties, leading to increased construction of homes. In 2023, the government implemented measures to make housing more affordable for low-income buyers, including value-added tax reductions and fee cuts.

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Opportunity –Government’s Initiatives to Promote Affordable Housing

The Construction Market in Indonesia is poised for significant growth, driven by government initiatives and the expanding middle class, which increasingly demands affordable housing. As the fourth largest contributor to the country's GDP, the construction sector is supported by substantial government investments aimed at enhancing infrastructure and connectivity across the archipelago. The government has unveiled a public infrastructure development plan with an investment of up to USD 430 billion, which includes the construction of new airports, extensive rail networks, and road expansions. Additionally, the ongoing relocation of the capital to Nusantara presents new opportunities for sustainable urban development and smart city initiatives. This robust framework, combined with the rising middle class, positions Indonesia’s construction market for a bright future, promising increased investment and sustained economic growth.

Impact of Escalating Geopolitical Tensions on Indonesia Construction Market

Geopolitical tensions can have a multifaceted impact on Indonesia Construction Market. Rising tensions can disrupt supply chains, leading to material shortages and delays. Investors may become more risk-averse, slowing the influx of foreign capital essential for large-scale projects. Trade barriers and higher costs for imported goods can further inflate project expenses. As geopolitical risks escalate, the Construction Market in Indonesia faces a heightened risk of project delays, cost overruns, and potential cancellations. The completion of vital infrastructure projects and overall economic growth could be jeopardized if these tensions persist.

Buildings Construction Type Holds Largest Market Share in Indonesia

The Buildings Construction segment accounts for the largest share of Indonesia Construction Market by type of construction. The segment’s dominance is fueled by a diverse range of projects, including residential, commercial, and leisure facilities. The rapid urbanization of major cities like Jakarta and Surabaya has spurred a surge in both residential and commercial developments, driven by a growing middle class. Landmark projects such as the Jakarta-Bandung High-Speed Rail and urban revitalization initiatives exemplify the country's commitment to modern infrastructure and living spaces. Investments in tourism, hospitality, and data centers are expected to further fuel the commercial sector's growth. While challenges such as rising material costs and regulatory hurdles persist, the Indonesian government's focus on public-private partnerships is poised to bolster the building construction sector. With a combination of domestic and foreign investment, the market is well-positioned to meet the increasing demand for housing and commercial facilities, contributing significantly to the country's economic development and improving quality of life. The other major segments in Indonesia Construction Market by type of construction include Heavy and Civil Engineering Construction, Specialty Trade Contractors, and Land Planning & Development segments.

Competitive Landscape

Indonesia Construction Market is fragmented, with numerous players serving the market. The key players dominating Indonesia Construction Market include Chiyoda Corp, Toyo Construction Co Ltd, Hyundai Engineering & Construction Co Ltd, Samsung C&T and Corporation, McConnell Dowell, Adhi Karya, PT PP (Persero), Wijaya Karya, Waskita Karya, and PT Jaya Konstruksi Manggala Pratama. The key marketing strategies adopted by the players are facility expansion, product diversification, alliances, collaborations, partnerships, and acquisitions to expand their customer reach and gain a competitive edge in the overall market.

Don’t miss the business opportunity of Indonesia Construction Market. Consult our analysts to gain crucial insights and facilitate your business growth.

The report's in-depth analysis provides information about growth potential, upcoming trends, and Indonesia Construction Market statistics. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends in Indonesia Construction Market along with industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.

Scope of the Report

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