Papua and Jakarta Have the Highest Construction Costs in Indonesia in 2023

The Central Statistics Agency (BPS) reports that Papua Pegunungan Province recorded the highest national Construction Cost Index (IKK) score at 251.25 points in 2023.

BPS states that the higher the IKK in a region, the higher the cost of constructing a building in that region.

To calculate the IKK, BPS uses three types of weighting data. First, the realized Regional Revenue and Expenditure Budget (APBD) data for the formation of building capital goods, used to calculate the project's purchasing power parity (PPP).

Second, data from the Bill of Quantity (BoQ) of completed projects. This weighting is used to calculate the PPP of Building Types and the PPP of Systems.

Finally, data from the Unit Price Analysis Book of the Ministry of Public Works and Public Housing (PUPR) based on the Minister of PUPR Regulation No. 1 of 2022, used to calculate the component value of material prices and construction labor costs.

"The 2023 IKK uses data on construction commodity prices, heavy equipment rental, and construction labor costs collected in four census periods: July 2022, October 2022, January 2023, and April 2023," BPS wrote in its report.

This collected data is compared to the chosen 2023 IKK reference city, Makassar. This region has an index close to the national average, considering the completeness of the data sources.

Papua Pegunungan's IKK of 251.25 points indicates that construction costs in the region are 151.25% more expensive than in Makassar.

Sadly, the top six spots on this list are all occupied by provinces in Papua. The cost index for these six provinces exceeds 120 points.

Meanwhile, DKI Jakarta occupies the seventh most expensive position with an IKK of 116.73 points.

Lampung is the province with the lowest national IKK in 2023, at 88.65 points, meaning construction costs in the province are 11.35% more expensive than in the reference city.

Here is a list of the 10 provinces with the highest national IKK in 2023:

1. Papua Pegunungan: 251.25 points
2. Papua Tengah: 215.86 points
3. Papua Selatan: 138.42 points
4. Papua: 135.56 points
5. Papua Barat: 124.26 points
6. Papua Barat Daya: 121.87 points
7. DKI Jakarta: 116.73 points
8. East Kalimantan: 115.58 points
9. North Maluku: 112.7 points
10. Riau Islands: 111.32 points