BMI's Executive Summary

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Indonesia, South East Asia's largest economy, is home to a vibrant construction industry and is witnessing increased investment flows into its infrastructure sector as the state strives to improve the statutory framework – making domestic infrastructure projects offered to investors more attractive and bankable. This report forecasts that the construction industry is likely to experience an average annual growth rate of 5.74% over the 2008-2012 forecast period.

In the current year, the central government has allocated nearly 20% of the overall budget expenditure to public infrastructure development. Moreover, with projects worth more than US$100bn in the pipeline, Indonesia's domestic construction industry looks set to experience robust growth, in line with economic expansion. In a recent Presidential address on the draft 2008 state budget, it was indicated that budgetary allocations to the transport and public works departments will be increased significantly. It is estimated that in the period 2005–2010, the Indonesian infrastructure sector would require over US$150bn in funding and a large part of this will have to be raised purely through foreign and domestic private investment.

However, Indonesia is plagued with a few negatives. Primary among these is its business-operating environment – considered among the poorest in Asia. Investors have often to contend with security concerns and poor governance characterised by widespread corruption, lack of transparency, poor legal compliance and a highly inefficient tax regime.

That notwithstanding,, BMI analysis indicates that on account of its vast untapped opportunities, the Indonesian construction industry value is expected to reach about US$38.76bn in 2008 and rise to US$44.4bn in 2012. Moreover, in BMI's Infrastructure Business Environment Ratings for Asia, Indonesia manages a net score of 50.

Chapter 1 - Executive Summary

Industry Trends & Developments

Market Overview

Indonesia’s Economy In 2005

Indonesia’s Construction Industry In 2006

Major Companies

Some Recent Investment Initiatives

Chapter 2 - Key Projects

Tsunami Reconstruction

Transport

Utilities

Tourism

Residential & Commercial Construction

Table: Indonesia--Major Infrastructure Projects

Chapter 3 - Business Environment Rankings

Introduction

Table: Asia Business Environment Rankings

Business Environment Rankings – Methodology

Long-Term Political Risk

Construction Growth

Competitive Environment

Anticipated Potential

Regional Overview

Indonesia: Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Construction Growth

Competitive Environment

Anticipated Potential

Chapter 4 - SWOT Analysis

Indonesia Infrastructure Industry SWOT

Indonesia Economic SWOT

Indonesia Political SWOT

Indonesia Business Environment SWOT

Chapter 5 - Industry Forecast Scenario

Table: Indonesia — Construction Industry Historical Data & Forecasts

Risks

Chapter 6 - Macroeconomic Activity

TABLE: GDP And Population

Chapter 7 - Competitive Landscape

Table: Indonesia – Key Players

Chapter 8 - Country Snapshot: Indonesia Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 9 - Company Monitor

PT Adhi Karya

John Holland Group

PT Wijaya Karya (WIKA)

PT Total Bangun Persada

Chapter 10 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Construction Industry

Sources

Chapter 11 - Appendix: Regional Demographic Data

Table: Manufacturing Wages (ave per annum), US$

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Competitive Landscape for Asia Infrastructure Reports: Sample of Companies Ranked

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Comparative company analyses and rankings by sales, % market share, employees, registration date and ownership structure. Company profiles include fully researched senior executives and contact details, business activity and leading products and services. SWOT (strengths, weaknesses, opportunities, threats) of the state’s business environment, infrastructure sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Asian Infrastructure Sources

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BMI's Asian Infrastructure Reports are based on an extensive network of multilateral organisations, government departments, infrastructure industry associations, chambers of commerce and company reports. Information sources include: