Indonesian Construction Industry Set for Robust Growth
The Indonesian construction market is projected to grow significantly, from USD 284.17 billion in 2024 to USD 407.87 billion by 2029, with a compound annual growth rate (CAGR) of 7.5%. This growth is driven by substantial government investment in infrastructure, including roads, bridges, airports, seaports, and railways, which aims to enhance connectivity, reduce logistical costs, and spur economic development. The government is also encouraging foreign investment and partnerships in the construction sector.
A significant focus is on addressing infrastructure financing, with the US and Indonesian governments collaborating on a USD 649 million investment to improve transport and logistics infrastructure and support micro, small, and medium-sized enterprises.
The development of Indonesia’s new capital city, Nusantara, is also a key growth driver, with a dedicated budget and ongoing progress. The construction industry is expected to grow by 4.5% in 2024 and continue to expand at an average annual rate of 6.4% from 2025 to 2027.
Additionaly, Indonesia’s mining industry, a key contributor to the national economy, is set to continue its growth, with the sector projected to expand by 3.48% in 2024. The industry, rich in commodities like nickel, gold, coal, and copper, plays a vital role globally, particularly in the electric vehicle market and energy production. The sector contributed 10.52% to Indonesia’s GDP in 2023, and despite challenges such as fluctuating global commodity prices and tighter financing conditions, demand for critical minerals remains strong.
The Indonesian government has also focused on enhancing the mining sector’s efficiency and competitiveness, with significant investments in infrastructure and smelting facilities.
Overall, Indonesia’s mining sector offers substantial opportunities for growth and investment, particularly in supporting industries like heavy machinery and digital technologies that can optimize mining and refining processes.