Sunday 8 February 2015

Indonesia Leads Asia to Global Development in Construction Market

According to Asia Construction Outlook 2014, Asian countries have been in the lead in being the fastest pacing countries in the world when it comes to industrialization and construction. Jakarta, Indonesia is forecast to have the highest potential in terms of growth and development.

Despite the slow development, the warnings of downfall and the great fluctuations of global economy, Asian countries have remained strong and have maintained their growth and development. The reason for this is said to be because of the demands of urbanization within their walls.

Indonesia emerges as a particularly interesting market. Construction spending in the world's fourth-most-populous country accounted for more than a quarter of the nation's gross domestic product last year, with about half of this expenditure funding infrastructure projects. Aecom's survey also found that Jakarta is viewed as the No 1 city in the region for potential market growth and profitability.

The country’s development is already one of the main topics by analysts and economists and has been in discussion by many sectors all over the world.

According to Global Intelligence Alliance report last 2014, property industry in Indonesia is expected to grow within 2015 on rising middle class and infrastructure spending. Indonesian middle class is expected to increase to 90 million. The report also anticipates property prices to increase to 15%-20% as they respond to fuel prices, electricity prices and bank interest rates.

The fact that foundation contractors plan to increase prices by 5% in March will also have an impact. The price increase will mostly affect small developers and the low-level segment. The middle-upper market should not be significantly impacted, however, because of the strong rise in purchasing power. Property developers in the retail and condominium segments are particularly interested in the suburbs and outskirts of Jakarta. This shows the fast-paced expansion of the country and its potential to compete in the global market.

A review from Aecom 2014 also adds that Indonesia is the top-rated country for expected market growth in the near term, followed closely by China. The city or metropolitan region with the most profitable construction market in Asia will be Jakarta.

Because of the country’s fast growth towards urbanization, big construction companies such as  Axis Capital Group who sells and rents construction equipment and is based in Singapore, also branched out their services and products in the country’s capital, Jakarta.

Analysts and economists are expecting more from Indonesia to pave the way for Asia towards great development.


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