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2. Highlights of forthcoming Indonesia study

The Indonesian market for new construction equipment reached record levels in 2022 with overall sales approaching 25,000 units. Despite a slight contraction in demand during 2023 and in the first half of 2024, a return to sustained long term growth is forecast to begin in 2025.

Demand has been underpinned primarily by record commodity prices since 2020, in particular in the nickel mining sector. Crawler excavators, specifically 20-30 tonne machines, constitute some 75 per cent of overall demand for new machines, and in 2023 more than 13,000 units were delivered, following sales of 18,000 units in 2022. In addition, the market has also been sustained by a large number of government-funded construction and infrastructure projects as well as a large programme of forestry clearance to create new agricultural land.

There remains a huge demand for infrastructure investment in Indonesia, although the instigation of projects can often be subject to delays caused by issues relating to funding and land acquisition. The conclusion of presidential elections later this year will inevitably result in a clearer government investment strategy which, together with a growing and resilient economy, should help to sustain buoyant demand for all types of earthmoving equipment during the medium to long term. Ongoing major infrastructure projects such as the construction of the country’s new capital city in Kalimantan, together with almost insatiable demand for Indonesia’s rich diversity of revenue generating mineral commodities, will also contribute significantly to a positive outlook for the construction equipment sector.

The sheer size of the domestic market has encouraged several global manufacturers to invest in production facilities in Indonesia. Komatsu, Hitachi and Sumitomo all produce crawler excavators in the wider Jakarta region, while Caterpillar assembles rigid dump trucks on Batam Island and Sakai assembles ride-on compaction equipment in its Jakarta factory.