Indonesia's Construction Sector Shows Promising Growth Prospects for 2026

Infrastructure and Renewable Energy Drive Growth

Indonesia's construction industry is entering 2026 with positive momentum following two years of stable growth. The national construction value is projected to increase from Rp 308.9 trillion in 2024 to Rp 331.5 trillion in 2026. This represents a growth rate of 0.8% in 2025 and a significant acceleration to 6.5% in 2026, resulting in a compound annual growth rate (CAGR) of approximately 3.6% during the period.

Key Drivers of Growth

1. Infrastructure Development: The government continues to push strategic transportation projects and affordable housing initiatives. Despite some tender delays, major infrastructure projects remain on track.
2. Renewable Energy Projects: The pipeline of renewable energy projects is strengthening the sector's prospects. Plans for developing over 17 GW of solar power and 11 GW of hydroelectric power by 2034 are creating new opportunities for construction companies.
3. Development of Nusantara Capital City (IKN): The construction of Indonesia's new capital city continues to drive growth in the sector.

Expert Insights

Cahyono Siswanto, Director of Market Insights & Economics at Quantum Indonesia, noted that infrastructure development remains the primary driver of the construction sector. He highlighted that the renewable energy pipeline is reinforcing the sector's positive outlook.

The growth prospects for Indonesia's construction industry in 2026 appear robust, supported by both government infrastructure initiatives and the increasing focus on renewable energy projects. This combination is expected to provide a strong foundation for the sector's continued expansion.