Indonesia Construction Market Outlook 2018 “Does the Government ‘Hold the Keys’ to a Prosperous 2018
BCI Economics is the analysis and forecasting arm of BCI Asia Pty Ltd, Asia’s leading information service for the construction industry and has released its annual Construction Outlook Report for Indonesia, titled “Does the Government ‘Hold the Keys’ to a Prosperous 2018?”
This report is designed to inform the latest market moves and construction developments in Indonesia and to provide analysis on Indonesia’s most important sectors including interactive data and forecasts together with analysis from the BCI Economics team. It also reveals exclusive information on construction activity by key sectors and regions.
In collaboration with Arsitag.com (the largest directory-platform for architecture and interior design) as media partner, BCI Economics aim to keep the professionals in this industry one step ahead, so they can confidently engage with this market. A review of key performance indicators for the condtruction sector show. A review of key performance indicators for the condtruction sector shows that :
Development of Indonesia Construction Market
In 2018 the total construction projects market (Building and Civil projects, excluding Oil and Gas) is predicted to increase slightly by 3% compared to 2017. This compares with a rise of 3% as well for 2017 over the previous year. The total Indonesia construction market is expected to reach IDR 451,337 billion in 2018 of which 65% would be in the Civil sector and 35% in the Building sector.
Civil sector activity (including Infrastructure, Transport and Utilities) picked up in 2017 rising by 4% compared with 2016. It is forecast that Civil construction will increase by a further 4% to be worth IDR 293,827 billion in 2018.
Building sector activity in 2017 registered an increase of 2% over 2016. Residential construction work has the largest share but Retail has been the major source of growth in 2017. Building construction is projected to continue to increase about 1% in 2018 to a value of IDR 157,511 billion. The Residential sector, at 41%, will remain as the biggest contributor, with the Industrial sector second largest at 18%.
Construction Industry Sentiment
During September to October 2017, BCI Asia conducted a Sentiment Survey among construction industry stakeholders to get their perception of the construction market in Indonesia and gauge their views on some of the key issues shaping the industry.
The survey involved 300 participants, representing contractors (35%), architects (31%), developers (21%) and others. Since 2014, respondents put improvements to infrastructure first as what they believed government should do to support the construction industry. The government has shown its commitment on infrastructure and utilities as key development, and this year improvements to infrastructure has been replaced by a perceived need for fiscal stimulus measures.
Our respondents appear to be less optimistic than last year about the expected development of the construction market in the next 12 months. However, the outlook is far from gloomy with 61% anticipating growth (compared with 75% in 2016 and 67% in 2015). Greater Jakarta is the region with the best prospects (72% expectation of growth) with Sumatera (53%) and Eastern Indonesia (57%) least optimistic.
Our respondents indicated that their optimism regarding their order situation over the next 12 months is more subdued than in 2016, however is still very positive with 85% expecting at least some improvement. Contractors in particular seem very enthusiastic with 60% expecting a ‘significant increase’ in their project workload.
We are confident that through this survey will be able to help construction in Indonesia to be more advanced in 2018.