Construction in Indonesia - Key Trends and Opportunities to 2023

Construction in Indonesia - Key Trends and Opportunities to 2023

  • GlobalData
  • May 2019
  • Construction
  • 49 pages

Report Description

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Construction in Indonesia - Key Trends and Opportunities to 2023

Summary

The Indonesian construction industry continues to expand at a fast pace, driven mainly by government investment in energy and transport infrastructure. It registered an annual growth rate of 6.1% in real terms in 2018.

The industrys output value is expected to continue to expand at a healthy rate over the forecast period (2019-2023), with investments in housing, transport and tourism infrastructure projects continuing to drive growth. In the 2019 budget, the government increased its total spending on transport infrastructure from IDR410.7 trillion (US$28.8 billion) in 2018 to IDR415 trillion (US$29.1 billion) in 2019. The focus on the development of local energy resources is also expected to drive industry growth. The government aims to produce 114GW of power by 2024 and 430GW of power by 2050, to meet the rising electricity demand of the country.

The industrys output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 5.75% over the forecast period.

GlobalDatas Construction in Indonesia - Key Trends and Opportunities to 2023 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
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Indonesian construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline

Key Highlights

- GlobalData expects the infrastructure construction market to register a forecast-period CAGR of 10.68% in nominal terms, driven by the governments focus on the development of transport infrastructure. In the 2019 budget, the government announced plans to build 2,271.3km of roads, 615.1km of new railway lines, four airports, 200km of toll roads and bridges by the end of 2019, with an investment of IDR415 trillion (US$28.4 billion).
- Forecast-period growth in the energy and utilities construction market will be driven by the governments plan to increase the countrys electricity production, in line with rising demand. The government aims to produce 114GW of power by 2024 and 430GW of power by 2050. In 2019, the government increased its total spending on power generation capacity by 6.7%, rising from IDR151.2 trillion (US$11.3 billion) in 2018 to IDR170.9 trillion (US$12 billion) in 2019.
- GlobalData expects the residential construction market to record a forecast-period CAGR of 8.46% in nominal terms, driven by the governments focus on the development of affordable houses. In the 2019 budget, the government announced plans to build 50,000 housing units across the country by the end of 2019. Moreover, in February 2019, the Ministry of Public Works and Housing (MPWH) announced plans to build 635,361 housing units with a total investment of IRD17.6 trillion (US$1.3 billion).
- Institutional construction markets forecast-period growth will be driven by increased government expenditures on healthcare and education. In the 2019 budget, the government increased its total spending on the education sector by 12.3%, going from IDR434.6 trillion (US$30.5 billion) in 2018 to IDR487.9 trillion (US$33.4 billion) in 2019. Moreover, the government allocated IDR299 billion (US$21 million) in the 2019 budget to restore damaged elementary and high schools in the Bekasi region. The government increased its 2019 budget spending on the healthcare sector by 13.6%, going from IDR107.4 trillion (US$7.5 billion) in 2018 to IDR122 trillion (US$8.3 billion) in 2019.
- The total construction project pipeline in Indonesia - as tracked by GlobalData, and including all mega projects with a value above US$25 million - stands at IDR9 quadrillion (US$630.9 billion). The pipeline, which includes all projects from pre-planning to execution, is well balanced, with 50.8% of the pipeline value being in projects in the pre-execution and execution stages as of May 2019.

Scope

This report provides a comprehensive analysis of the construction industry in Indonesia. It provides -
- Historical (2014-2018) and forecast (2019-2023) valuations of the construction industry in Indonesia, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants

Reasons to buy

- Identify and evaluate market opportunities using GlobalData'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.
- Formulate and validate strategy using GlobalData's critical and actionable insight.
- Assess business risks, including cost, regulatory and competitive pressures.
- Evaluate competitive risk and success factors.

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Table of Contents
1 Executive Summary
2 Construction Outlook: At-a-glance
3 Latest News and Indicators
4 Key Drivers and Risks

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