Despite the global economic slowdown in 2023, the positive economic growth in the main trading partner countries in April pushed the performance of the non-oil and gas processing industry to improve in April 2023. This can be seen from the increase in trading activities in several of Indonesia's main partner countries. In addition, controlled inflation in partner countries and the trend of declining commodity prices have also encouraged the industry to continue to expand. The momentum of Hari Raya that occurred in April also contributed to boosting the performance of several sub-sectors of the non-oil and gas processing industry. This condition is reflected in the value of the Industrial Confidence Index (IKI) in April which again showed an expansion value.
"The April 2023 Industrial Confidence Index (IKI) reached 51.38, slowing down by 0.49 points compared to March 2023," said Spokesperson for the Ministry of Industry (Kemenperin), Febri Hendri Antoni Arif, during the April 2023 IKI release in Jakarta, Friday (28 /4).
Despite the slowdown, in April 2023 there was an increase in the number of industrial sub-sectors that experienced expansion, namely as many as 15 industrial sub-sectors, compared to March 2023 where only 14 industrial sub-sectors with a share of the Non-Oil and Gas Processing Industry GDP in 2022 reaching 80.2%. This share is supported by sub-sectors that have a sizable contribution, such as the Food Industry; Industry of Chemicals and Products made of Chemicals; and the Motor Vehicle, Trailer and Semi-Trailer Industry.
Judging from the forming variables, all the variable indexes forming the IKI in April 2023 will experience expansion. However, if we look in more detail, the decrease in the value of IKI is due to a decrease in the value of the Product Inventory variable by 2.67 points to 52.33 which indicates an increase in inventory stock and the New Orders variable decreased 0.76 points to 50.57 indicating a decrease in new orders . On the other hand, the value of the Production variable increased from 50.69 in March 2023 to 52.08 in April 2023. Domestic Orders are still the dominant factor influencing the New Orders variable index.
Febri explained, the decline in IKI was due to several sub-sectors that had a large share of GDP experiencing contraction after previously experiencing expansion. Second, the order variable as the largest IKI value-forming variable experienced a decline this April. This is because the high household demand during the month of Ramadan and Hari Raya causes the price of manufactured products to increase, on the other hand production spending and government spending decrease significantly. Apart from the high price factor, limited working hours during the month of Ramadan and holidays are the reason for the decline in orders. It is believed that next month domestic orders will increase as the industry begins normal production. This is a seasonal pattern that you don't need to worry about.
"The majority of business actors stated that general business conditions in April 2023 were stable at 45.2% and 28.7% answered that the conditions of their business activities had improved compared to March 2023," Febri added.
Likewise the outlook on business conditions for the next 6 (six) months, 64.7% of business actors are more optimistic, this figure has increased compared to the previous month which was 63.5%, and is the highest figure since IKI was launched. The majority of respondents who answered optimistically expressed their belief that market conditions would improve and their confidence was due to better central government policies. While 9.9% of business actors are still pessimistic about business conditions for the next 6 (six) months, this figure is also the lowest value since IKI was launched.
