Economy Growth Driving Construction Industry in Indonesia: Ken Research
Key topics covered in the Report
- Current economic scenario of Indonesia
- Detailed insight into the operating environment for the construction sector of Indonesia
- Detailed overview of project financing and project risk and return
- Major market players of the construction industry of Indonesia
- Challenges and Key driving factors for the Infrastructure Industry in Indonesia
Ken Research has announced its latest publication, “Indonesia 2016 Construction Outlook: Infrastructure Opportunities with Relative Risk and Challenges” which explains economic scenarioof construction sector of Indonesia. The report provides detailed insights of key market trends and opportunities prevailing in the construction sector of Indonesia. Further, it gives detailed overview of major market players, current market strategies, government policies, business plans and goals of the sector. The report highlights major challenges and risks prevailing in the sector. The report plays a crucial role to provide information about competitors and opportunities prevailing in market further providing detailed strategies to mitigate risk.
Economic Environment of Indonesia
Indonesia is one of the emerging economy of Asia. The economy has witnessed spectacular growth and development in past two decades. Though Indonesian economy faced immense trouble in 1990’s due to Asian financial crises but economy started gaining its stability back with onset of twenty first century. Earlier, economy was heavily dependent on agriculture for its growth but after 90’s, the scenario changed completely. Now, major part of economic growth is attributed to secondary and tertiary sector even though agricultural exports are still high. Further, demand is vigorous in Indonesian economy due to improving income and people’s standard of living. This huge demand is due to massive population growth. However, dwindling commodity prices, economic turbulences in China, gradual weakening of Indonesian domestic currency due to strengthening of dollar, investment risks, natural calamities, etc. has prevented complete growth of Indonesian economy.
Brief Overview of Indonesian construction sector
With a target GDP growth of 7-9%, Indonesian government has adopted stern policies ad strategies to enhance both quality and quantity of infrastructure in the country and this is why numerous construction megaprojects are undertaken in the country. Net value of Indonesian infrastructural projects is US$ 330 Billion. Further projects for pipeline construction, residential property construction has been undertaken recently. Signature tower floors, Kalibaru post, peruri 88 floors, Jakarta-Bandung super express, Trans Java toll road, etc. are some marvellous megaprojects undertaken by Indonesian construction sector.
This substantial rise in construction activity in recent years is due to many factors which are listed below:
- Rise in GDP in last two decades.
- Rise in population which is rising demand for residential projects.
- Rapid urbanization in Indonesian economy.
- Rapid industrialization in Indonesian economy.
- Rise in government and private investment in construction sector.
However, there are certain challenges faced by the construction industry:
- Inadequate investment in construction sector
- Poor implementation of projects
- Falling GDP
Major market players
PT PLN Persero, PT Kayan Hydro Energy, Sarula Operations, PT Paiton, PT Lestari Banten, PT Antam, PT DSSP Power Sumsel, PT Kereta API Indonesia (PT KAI), PT KAI Commuter Jabodetabek (KCJ), PT Mass Rapid Transit Jakarta, PT Jakarta Monorail (PT JM), Indonesia Ministry of Transport, Indonesia Ministry of Public Works, Jakarta City Administration are major market players in the construction industry in Indonesia.
Thus, we can say that significant expansion has been witnessed in the construction sector of Indonesia. With huge infrastructural projects being undertaken and gigantic engineering marvels being constructed, Indonesia is emerging as a leader of construction industry in Asia. However many challenges like inefficiency in implementation, falling GDP, shortage of investment in the industry is constraining complete growth of the sector.
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Ankur Gupta, Head Marketing & Communications