“Indonesia's emerging economy is in dire need of better infrastructure, while rising personal income is driving demand for residential and commercial property. These factors put the country squarely on the radar of the global construction industry. Indonesia's construction industry, already worth 10% of the country’s massive GDP, will grow into one of the largest in the world in the coming decade. For suppliers, investors and exporters in every single sector of the building and interiors industries, the South-East Asian archipelago economy offers unequalled opportunities for short and long-term returns.
Ambitious deadlines and increased green building standards make efficient building management central in Indonesia. Growing population, rapid urbanization, and increased disposable income are credited by the report as propelling a rise in construction market value from USD102,64in 2017 to USD 136,26bn by 2021, thereby exhibiting a CAGR of 7,34%, in value terms, during 2017-2021. As well as presenting a variety of upcoming projects that will take advantage of increased market performance, the report highlights key building technologies and standards that are developing within the boom.
Listed projects include the national toll road project, national railway projects, and ventures in the energy and waste management sectors. Benefiting from the excelling market, these construction projects come hand in hand with tight deadlines; one of which is the five-year plan to construct 1 million houses across the country.
Government investments in transport infrastructure, energy and utilities construction and residential buildings will contribute to this growth. Moreover, the National Development Program 2025 and National Affordable Housing Program will also support industry growth.
In March 2018, the Ministry of Energy and Mineral Resources approved Rencana Umum Penyediaan Tenaga Listrik (RUPTL) 2018-2027, a ten-year electricity supply business plan. According to RUPTL, electricity demand in the country is projected to increase by 8.6% annually, going from 216.8TWh in 2016 to 457.0TWh in 2025. PT Perusahaan Listrik Negara (PLN), the state-owned power company, estimates that IDR2.0 quadrillion (US$153.7 billion) in capital investment will be required to develop the country's electricity system by 2027.
Timetric expects the residential construction market output to record a forecast-period CAGR of 8.41% in nominal terms, driven by the government's plans to build affordable houses for low- and middle-income households. The government plans to build one million social houses with an investment of IDR66.8 trillion (US$5.0 billion) by 2019. In addition, the government is providing subsidies to low- and middle-income people to buy houses. In 2017, the government announced plans to provide IRD14.6 trillion (US$1.1 trillion) of subsidies to low income families.
Under the National Energy Policy, the government aims to increase the share of renewable energy in the total energy mix from 12.6% in 2017 to 23% in 2025, 25% by 2030 and 31.0% by 2050. Accordingly, the government plans to increase the country's geothermal power generation capacity from 1.8GW in 2017 to 5.0GW by 2025. Moreover, the government plans to build 16 wind power plants by 2024.
For the Asian market the business growth for the elevator industry is good, and Indonesia is growing annually, in the range of 20%, "said Hendrikus Hendra Gozali, President Director, PT Berca Schinder Lifts, shortly after launching Schindler 5500.
Frost and Sullivan analysis reported that Indonesia in 2011 has USD 11.45 Billion revenue in this business followed by Thailand with USD 8.85 Billion and Singapore has market size USD 8.41. The elevator industry is growing rapidly due to increasing urbanization and the subsequent.