VISI predicted that in 2020 the construction sector will experience growth of 0.1669 points, from 6.1947 percent to 6.3616 percent.
The increase was supported by the development of several government projects related to infrastructure, subsidized housing, and relocation of the capital city. As well as developments from the property sector.
The Coordinating Minister for Economic Affairs said that infrastructure development in 2020 – 2024 will focus on three main frameworks, namely basic service infrastructure, economic infrastructure, and urban infrastructure. This is done to increase investment entering Indonesia.
In 2020, the infrastructure project budget is IDR 419.2 Trillion or 4.9% greater than the previous value of IDR 399.7 Trillion. The budget will largely be focused on road construction projects with a target to double from the previous year’s target. As for bridge construction, it has decreased by around 2% from the previous year.
In addition to the road construction project, there is a continuation of the subsidized housing construction project whose implementation is handled by the Ministry of Public Works and Public Housing (PUPR). Until the end of 2019, the Ministry of PUPR is targeting the construction of 1.25 million housing units for the community and still lacking 200-unit housing construction to meet the target of building five million housing units over the past five years since 2015. It was also explained that the Ministry of PUPR still has a stock of 20,000-unit housing construction which will be implemented in the next few years. As for the project to move the capital to East Kalimantan, the program, which was originally set to begin in 2021, was accelerated to the beginning of 202. However, because it was only an initial transfer, the budget prepared in 2020 was only IDR 2 trillion. While the total budget for the project is around IDR 466 trillion to IDR 486 trillion. The project involved around 6000 contractors throughout Indonesia, which consisted of various sectors of the contractor from construction to electricity. Meanwhile, the number of workers prepared is as many as 12,000 people. The number is the local workforce ready to use because it already has a construction workforce certificate. Based on this, the construction sector is predicted to increase and not only for big players but also for players below.
The property sector also contributed to the development of the construction sector. In 2020, the property sector is predicted to increase by 0.2666 points from 3.9767 percent to 4.2433 percent.
This is supported by an increase in property investment and property prices that continue to increase even in the next year will increase to reach 9 percent. Stretching the growth of the property sector will bring up property development projects which will certainly involve the homeland contractor.
Amid the incessant construction projects, challenges will arise related to the supply chain of building materials and equipment needs. With this increase, construction suppliers or vendors must be prepared to handle future demands because if they cannot lead to a scarcity of quality construction products on the market can cause imported products to enter Indonesian market (market potential is entered by outside players), time to work on projects being delayed (waiting for materials to arrive), or even project delays (waiting for the entire stock of material needs to be met so there is not too much time).
In addition, the payment system between the contractor and the project organizer that was the main problem in the previous year also must be immediately improved so that it can simplify the project work process that will be implemented in 2020 (both the turnkey and term payment systems).