The analyst expects the construction industry in Indonesia to expand by 4.1% in real terms in 2025, supported by investments in transport infrastructure and energy projects, coupled with allocations announced as part of the 2026 Budget. According to the Badan Pusat Statistik (BPS), the average value index of construction completed by construction companies rose by 3.2% year-on-year (YoY) in the first half of 2025, increasing from 164.5 in H1 2024 to 169.8 in H1 2025. In August 2025, the government presented the 2026 draft Budget in the parliament, which includes an expenditure of IDR3.8 quadrillion ($235.9 billion); this is 7.3% higher than the latest spending estimate for 2025. Some of the major allocations announced in the budget include IDR757.8 trillion ($47.2 billion) for the education sector, IDR402.4 trillion ($25.1 billion) for energy security, IDR335.3 trillion ($20.9 billion) for the defence sector, and IDR244 trillion ($15.2 billion) allocated for the healthcare sector.
The Indonesian construction industry is expected to expand at an average annual rate of 5.8% from 2026 to 2029, supported by investments in housing, mining, transport infrastructure, and energy projects. To support the energy sector, in June 2025, the government revealed the 2025-2034 Electricity Supply Business Plan, which plans to add 69.5GW of new power generation capacity by 2034, with 76% coming from renewable sources. Of the total, 17.1GW will be from solar, 11.7GW from hydro, 7.2GW from wind, 5.2GW from geothermal, and the rest from other sources. To achieve this target, it will require an estimated investment of IDR2.9 quadrillion ($182 billion). In October 2025, the Ministry of Investment and Downstream Industry signed 13 Memorandums of Understanding (MoUs) with the Ministry for Infrastructure and Regional Development, as part of the Indonesia International Sustainability Forum (ISF) 2025, to bolster investment across the country. The total value of these commitments reached IDR278 trillion ($17.3 billion), covering sectors such as clean energy, marine resources, carbon management, forestry, and green infrastructure. In terms of housing infrastructure, the housing minister announced that the government, through state banks, will disburse IDR130 trillion ($8.1 billion) in construction loans to selected property developers and small businesses, aiming to help them scale up their operations and expand their stores. The loans will support the administration’s goal of delivering three million affordable homes annually by 2029 and creating additional employment opportunities.
The Indonesian construction industry is expected to expand at an average annual rate of 5.8% from 2026 to 2029, supported by investments in housing, mining, transport infrastructure, and energy projects. To support the energy sector, in June 2025, the government revealed the 2025-2034 Electricity Supply Business Plan, which plans to add 69.5GW of new power generation capacity by 2034, with 76% coming from renewable sources. Of the total, 17.1GW will be from solar, 11.7GW from hydro, 7.2GW from wind, 5.2GW from geothermal, and the rest from other sources. To achieve this target, it will require an estimated investment of IDR2.9 quadrillion ($182 billion). In October 2025, the Ministry of Investment and Downstream Industry signed 13 Memorandums of Understanding (MoUs) with the Ministry for Infrastructure and Regional Development, as part of the Indonesia International Sustainability Forum (ISF) 2025, to bolster investment across the country. The total value of these commitments reached IDR278 trillion ($17.3 billion), covering sectors such as clean energy, marine resources, carbon management, forestry, and green infrastructure. In terms of housing infrastructure, the housing minister announced that the government, through state banks, will disburse IDR130 trillion ($8.1 billion) in construction loans to selected property developers and small businesses, aiming to help them scale up their operations and expand their stores. The loans will support the administration’s goal of delivering three million affordable homes annually by 2029 and creating additional employment opportunities.
The Construction in Indonesia - Key Trends and Opportunities to 2029 (Q4 2025) report provides detailed market analysis, information, and insights into the Indonesian construction industry, including:
- The Indonesian construction industry's growth prospects by market, project type and construction activity
- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Indonesian construction industry
- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.
Report Scope
This report provides a comprehensive analysis of the construction industry in the Indonesia. It provides:
- Historical (2020-2024) and forecast (2025-2029) valuations of the construction industry in the Indonesia, featuring details of key growth drivers.
- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
- Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
- Listings of major projects, in addition to details of leading contractors and consultants
Reasons to Buy
- Identify and evaluate market opportunities using our standardized valuation and forecasting methodologies
- Assess market growth potential at a micro-level with over 600 time-series data forecasts
- Understand the latest industry and market trends
- Formulate and validate business strategies using the analyst's critical and actionable insight
- Assess business risks, including cost, regulatory and competitive pressures
- Evaluate competitive risk and success factors
Table of Contents
1 Executive Summary2 Construction Industry: At-a-Glance6 Construction Market Data
3 Context
4 Construction Outlook
5 Key Industry Participants
7 Appendix
List of Tables
List of Figures
