Table 3.1: Indonesia’s Import of HS 68 Stone, Plaster, Cement, etc in Millions of US Dollars.
After reeling under the impact of the monetary crisis in 1997, marked with a gross domestic products (GDP) contraction, the country’s economy began to regain strength in 2000. The interest rates begin to fall enabling the property and construction sector to recover from a heavy slump.
A substantial growth of 5.6 % was recorded in the country’s economy in 2006 and the interest rate declined to 8.25% in 2007 from 18% in 2003. In 2004, the property sector was booming. New housing, apartment and shopping centre projects emerged and development was brisk as if the condition had returned to what it was before the crisis hit the country.
Demand for construction materials, therefore, surged again. The government resumed construction of a number of major infrastructure projects, especially toll roads which were earlier stopped for financial difficulties.
The following table shows the interrelationship between economic growth and that of the construction sector. The construction sector is sensitive to GDP growth. When the country’s GDP fell 13%, the construction sector shrank by 36% and on the contrary when the GDP rose 5% the construction sector surged by 8%.
In 2006, Indonesia imported US$1.47 billion worth of building materials, increasing by about 7 % over the preceding year. Of all the building materials, apart from steel, glass constituted the bulk of imports followed by ceramic products such as roofing and tiles.
As the supply of building materials is also dependent on the construction industry, it is also important to look at the construction industry per se. Private sector construction demand is anticipated to lead the growth.
From 2006 – 2009, there will be more than 36,000 new apartment units from a total of 47 projects entering the Jakarta Market. Most of the units will be located in North Jakarta (29.5%) and West Jakarta (25.2%) Of this upcoming supply, the middle-to-low segment remains the major market with a proportion of around 45%. Another avenue for Malaysian building materials suppliers is also to look into the possibility of supplying big Indonesian construction companies that are venturing into projects overseas such as in China and Vietnam.
A substantial growth of 5.6 % was recorded in the country’s economy in 2006 and the interest rate declined to 8.25% in 2007 from 18% in 2003. In 2004, the property sector was booming. New housing, apartment and shopping centre projects emerged and development was brisk as if the condition had returned to what it was before the crisis hit the country.
Demand for construction materials, therefore, surged again. The government resumed construction of a number of major infrastructure projects, especially toll roads which were earlier stopped for financial difficulties.
The following table shows the interrelationship between economic growth and that of the construction sector. The construction sector is sensitive to GDP growth. When the country’s GDP fell 13%, the construction sector shrank by 36% and on the contrary when the GDP rose 5% the construction sector surged by 8%.
In 2006, Indonesia imported US$1.47 billion worth of building materials, increasing by about 7 % over the preceding year. Of all the building materials, apart from steel, glass constituted the bulk of imports followed by ceramic products such as roofing and tiles.
As the supply of building materials is also dependent on the construction industry, it is also important to look at the construction industry per se. Private sector construction demand is anticipated to lead the growth.
From 2006 – 2009, there will be more than 36,000 new apartment units from a total of 47 projects entering the Jakarta Market. Most of the units will be located in North Jakarta (29.5%) and West Jakarta (25.2%) Of this upcoming supply, the middle-to-low segment remains the major market with a proportion of around 45%. Another avenue for Malaysian building materials suppliers is also to look into the possibility of supplying big Indonesian construction companies that are venturing into projects overseas such as in China and Vietnam.
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