Indonesian construction firms hope to reach annual new contract targets in the second half of 2014 after a below par first half.
The firms, mainly state-owned companies, struggled to match their targets because of state budget cuts and elections, according to a Jakarta Post report Monday.
The companies are optimistic about closing the gap in the second half.
State-run Adhi Karya amassed Rp 3.5 Trillion (US$297.14 Million) of new contracts in its order book for the first half, or around 16% of its Rp 21.1 Trillion target for new contracts.
President Susilo Bambang Yudhoyono decided in May to slash Rp 100 Trillion from the operational budgets of his ministries. The Public Works Ministry saw the most drastic budget cuts, in a belt-tightening attempt to cushion the overshooting energy subsidy and lower-than-expected tax revenues.
The cut in the state budget hit state-run construction firms hard. They rely heavily on government projects to generate income.
Construction research centre BCI Asia Indonesia had previously estimated that the country’s construction sector might secure a total of Rp 493 trillion in new contracts in 2014, up 14.7% compared to the Rp 428.5 Trillion in contacts carried out last year with a stronger demand for commercial buildings.
The research centre said this year's estimated annual growth declined from 2013, when the country booked a 39% increase in new contracts compared to the previous year, given Indonesia's unfavourable economic condition and difficulties in keeping track with new projects because of the elections, the Jakarta Post report said.