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Jakarta Post

Analysis: COVID-19 impact on construction sector

  • Mamay Sukaesih

    Industry analyst, Bank Mandiri

Jakarta   /   Wed, May 6 2020   /  01:35 am

In 2020, we expect construction sector growth to be depressed considerably as a result of the COVID-19 outbreak. Postponement of a number of construction projects, both infrastructure and property projects, is the major contributing factor behind the decline in the construction sector. Construction, over the past decade, has grown above the national economic growth rate but with a declining growth trend. In 2011-2019, on average, the construction sector grew 6.58 percent year-on-year (yoy) while national economic growth stood at 5.33 percent yoy. Construction sector growth fell from 9.02 percent yoy in 2011 to 5.76 percent yoy in 2019.

The COVID-19 outbreak has reduced construction activity this year in both the private and public sectors. In the private sector, both the wholesale and retail segments, and companies and households that initially wanted to develop or renovate buildi...