Companies and Markets: Indonesia Construction Market Data & Forecast to 2013

Jakarta Forum, Indonesia Construction Market Data & Forecast to 2013 report is the essential source for Construction industry data and analysis covering Indonesia, both at the top level and providing in-depth category and channel insight.

The report provides historical data and forecasts for the Indonesian Construction industry in the period 2004-2013, detailed profiles and financial metrics covering the major market players, a breakdown of key recent M&A and partnership activity, and comprehensive analysis of the key factors driving the industry at consumer, market and company level.

The Indonesian construction industry grew at a CAGR of 17.00% for the period 2003-2008. Non-residential sector’s market share was 89.0% in 2008, while residential sector accounted for the balance 11.0%. The Indonesia construction market has experienced downturn in growth rates since the heady days of 2004, due to the lower demand in the housing sector.

Non-residential sector has remained relatively strong in this period, but faced decline in 2008 was due to slowdown in construction investment comparison to the preceding years. Further, government investment was lower in 2008, due to low rate of realized government capital expenditures. The total value of construction projects in Indonesia in 2008 was US$85.5 billion. The market has expanded at a compound annual growth rate (CAGR) of 17.0% since 2003. This positive CAGR was primarily driven by double-digit annual growth rates in 2004 and 2005. However, in 2006 and 2008, the market recorded lower growth rates of 6.8% and 7.8% respectively.

On the whole, the Indonesian construction market has been slowing down due to the weak demand in the residential housing sector coupled with increased difficulty for firms to raise capital for large projects. Non-residential construction is the major sector of the Indonesian construction market. With a value of US$76.1 billion, non-residential construction accounted for 89.0% of the Indonesian construction market’s value in 2008. The sector accounted for 77.3% of the total market in 2003. Growth in the non-residential sector was principally driven by utilities sub-sector (power generation plants) and commercial and retail buildings. Residential construction segment stagnated during 2007-2008 due to lower demand from consumers. One of the primary reasons was the increase in interest rates by the Bank of Indonesia for seven consecutive months during 2008. In 2008, the sector was worth US$9.4 billion accounting for 11.0% of the total construction market value.

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