Professor of Infrastructure and Transportation and Head of the Construction Project Management Laboratory at the Department of Civil and Environmental Engineering, Faculty of Engineering, Universitas Gadjah Mada (FT UGM), Danang Parikesit, projected that the construction services sector will grow by 4.5 – 6 percent in 2026.
This growth will be supported by the development of the new capital city (IKN), state budget allocations for agricultural infrastructure, national strategic projects (PSN), and regional infrastructure funded through the Special Allocation Fund (DAK).
“Major projects include the construction of three million private housing units, with an estimated IDR 240 trillion allocated for one million houses in 2026, as well as strategic government initiatives in energy infrastructure, industrial zones, and downstream industries. These mark a shift in development strategy from state budget-driven projects to creative financing, partnerships, and private sector involvement,” said Professor Parikesit in a webinar titled “Market Outlook: Business Risk Perceptions in Construction Services 2026” on Thursday (Sep. 4).
Despite the promising outlook, Professor Parikesit highlighted challenges faced by small and medium-sized construction enterprises (UJK), which remain vulnerable due to business uncertainty, limited technology, and human resource capacity.
Professor Parikesit also stressed the need for sustainable policies through several strategic measures, including providing real-time information on strategic commodities, massively enhancing expert and skilled workforce competencies, supporting financing and guarantees, setting industry standards, diversifying business models, and strengthening partnerships for UJK.
Director General of Construction Development at the Ministry of Public Works, Boby Ali Azhari, emphasized that the construction sector plays a vital role in the national economy.
He added that the national economic growth target of 8 percent by 2029 will also be supported by construction. According to Azhari, transformation is required to address the sector’s challenges.
Echoing this view, Head of the Center for Transportation and Logistics Studies (Pustral UGM), Dr. Ikaputra, underlined that the transportation, logistics, and construction services sectors can mutually reinforce one another in building sustainable infrastructure.
He called on stakeholders to strengthen cross-sector collaboration to support adaptive infrastructure development and drive Indonesia’s future economic growth.
Author: Kezia Dwina Nathania
Editor: Gusti Grehenson
Post-editor: Rajendra Arya
Illustration: Freepik