Indonesian cement consumption rose 16.8 per cent in the first quarter to March from a year ago, driven by strong demand outside Java, Indonesian Cement Association (ASI) chairman Urip Timuryono said on Friday.
Domestic cement consumption in the period reached 8.78Mt, against 7.52Mt a year earlier.
"Looking at the first-quarter data, I am wondering if our full-year growth estimate of 7.0 per cent is still valid," Timuryono told Thomson Financial.
In March, domestic cement consumption reached 2.99Mt, rising 15.5 per cent from the same month a year ago. In February, cement consumption totaled 2.7Mt.
Timuryono said the first-quarter performance was surprising given that the government only expected the economy to grow in a range of 6.2 per cent to 6.3 per cent.
"Normally, cement consumption growth is pretty close to GDP growth. So it is interesting to study what the key factors had been," he said.
Cement consumption in Java, the country’s most populous island and the main cement market, grew 11 percent to 4.72Mt in the first quarter from a year earlier.
Markets outside Java, from Sumatra to Papua, grew between 20 per cent and 36 percent.
Timuryono said factors that could have boosted demand outside Java might include the implementation of the government’s infrastructure projects, mostly roads. In some areas, farmers may have enjoyed higher incomes as a result of the increase in commodity prices.
"I understand that some regions no longer use asphalt to build roads. They now prefer to use concrete so that the road would last longer. That should have triggered an increase in cement demand," he said.
Cement consumption is an important economic indicator as it reflects the level of construction activity in the country.