Market Trends of Indonesia Construction Industry
Growth of Infrastructural Plans Drives the Construction Market In Indonesia
As demand for such services continues to rise in Indonesia, more data centers will soon be built there. Indonesia is on track to overtake Singapore as Southeast Asia's second-largest public cloud market. The country is already home to major cloud providers like Google Cloud, AWS, Microsoft Azure, and Alibaba Cloud.
Equinix is currently trying to jump on board in Indonesia. In order to establish its International Business Exchange (IBX) data center in Jakarta, the tech company is expected to invest USD 74 million. The expansion is anticipated to make it possible for businesses in Indonesia and beyond to use its reliable platform to link and connect the basic infrastructure that underpins their operations.
The Indonesian government also allocated a budget of IDR 422.7 trillion (USD 27.01 billion) from the 2024 state budget, its largest infrastructure budget in five years, to work on infrastructure projects. This represented a growth rate of 5.8% over the 2023 infrastructure budget realization forecast, amounting to IDR 399.6 billion (USD 25.54 billion).
Increased Involvement of State-owned Enterprises (SOEs) Driving the Market
More than 50% of construction roles are awarded to established Indonesian state-owned enterprises (SOEs) and companies such as Wijaya Karya, Adhi Karya Waskita Karya, and Pembangunan Perumahan. These SOEs are involved in major infrastructure projects across the market, such as the Patimban Deep-Sea Port in West Java or work relating to the Jakarta Mass Rapid Transit System.
Under the National Medium-Term Development Plan (2020-2024 RPJMN), the government plans to invest IDR 6 quadrillion (USD 412 billion) in developing transport, industrial, energy, and housing infrastructure projects by 2024.
Indonesia Incorporated Day was held on January 24, 2024, at Nusa Dua in Bali, Indonesia. The event was co-organized by the Indonesian Ministry of Foreign Affairs (MoFAD), the Ministry of State of Enterprises (SOE), and PT BNI. The objective of the Indonesia Incorporated Day was to promote cooperation between the government, private sector, SOEs, and micro, small, and medium enterprises to achieve the goal of Indonesia Going Global.
