New York, NY — 12/20/2017 — Indonesia's construction will continue to thrive over the forecast period (2017–2021), 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 2010–2014 to develop the country's infrastructure also supported growth during the review period.
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 2015–2019, under which the government aims to develop the country's transport infrastructure.
The industry's 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 (2012–2016).
Despite government support for infrastructure development and the country's 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.
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
Reasons to Buy
– 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
– Formulate and validate strategy using critical and actionable insight.
– Assess business risks, including cost, regulatory and competitive pressures.
– Evaluate competitive risk and success factors.
– 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) 2015–2019, IDR4.8 quadrillion (US$360.6 billion) will be invested in the country's infrastructure projects in the 2015–2019 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 country's 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) 2016–2025, 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 country's chronic housing shortage. Accordingly, the government launched a five-year One Million Houses Program in mid-2015.
Table of Content: Key Points
1 Executive Summary
2 Industry Outlook
2.1 Commercial Construction
2.2 Industrial Construction
2.3 Infrastructure Construction
2.4 Energy and Utilities Construction
2.5 Institutional Construction
2.6 Residential Construction
3 Key Issues and Developments
4 Market Data Analysis
4.1 Construction Output and Value Add
4.1.1 Construction output by project type
4.1.2 Construction output by cost type
4.1.3 Construction output by activity type
4.1.4 Construction value add by project type
4.2 Commercial Construction
4.2.1 Commercial construction output by project type
4.2.2 Commercial construction output by cost type
4.2.3 Commercial construction output by activity type
4.2.4 Commercial construction value add by project type
4.3 Industrial Construction
4.3.1 Industrial construction output by project type
4.3.2 Industrial construction output by cost type
4.3.3 Industrial construction output by activity type
4.3.4 Industrial construction value add by project type
4.4 Infrastructure Construction
4.4.1 Infrastructure construction output by project type
4.4.2 Infrastructure construction output by cost type
4.4.3 Infrastructure construction output by activity type
4.4.4 Infrastructure construction value add by project type
4.5 Energy and Utilities Construction
4.5.1 Energy and utilities construction output by project type
4.5.2 Energy and utilities construction output by cost type
4.5.3 Energy and utilities construction output by activity type
4.5.4 Energy and utilities construction value add by project type
4.6 Institutional Construction
4.6.1 Institutional construction output by project type
4.6.2 Institutional construction output by cost type
4.6.3 Institutional construction output by activity type
4.6.4 Institutional construction value add by project type
4.7 Residential Construction
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