Manufacturing in the country accelerated along with the increase in new demand in the market. Based on the release of S&P Global in June, Indonesia's Manufacturing Purchasing Managers' Index (PMI) touched the level of 52.5, a significant increase compared to the previous month's level of 50.3. "Alhamdulillah, we must be grateful that our manufacturing industry activity continues to thrive. This is marked by the achievement of the Indonesian Manufacturing PMI remaining in an expansionary phase for up to 22 consecutive months or almost two years. This means that the level of optimism from our industry players as a whole has also increased," said the Minister of Industry Agus Gumiwang Kartasasmita in a written statement, Monday (3/7/2023).
However, Agus highlighted the textile and textile products (TPT) industry which is still experiencing contractions. In fact, this sector is one of the three manufacturing sub-sectors that experienced a contraction in the June 2023 IKI survey.
"The cause of the textile industry is still suffering because the domestic market is flooded with imported products, especially those that enter through PLB (Bonded Logistics Centers). The Ministry of Industry requests that strict supervision be carried out on goods leaving PLB entering the domestic market, as well as on marketplaces which are also product entry points. imported textiles," said Agus.
The textile industry is still in a battered state, imported clothes are the culprit
The Ministry of Industry also sees opportunities for the TPT industry with the new school year. This is believed to encourage and revive the TPT industry which is currently under pressure.
Through the policy of Increasing Use of Domestic Products (P3DN), it is hoped that the fulfillment of public school clothes and employee clothing in the government can increase production activities in the TPT industry to meet this demand.
Based on the S&P Global report, the expansion experienced by the Indonesian manufacturing industry in June 2023 was supported by an increase in new orders. This resulted in an increase in production, which also contributed to an increase in the number of workers.
Jingyi Pan, Economics Associate Director of S&P Global PMI Market Intelligence, said that growth momentum in the entire Indonesian manufacturing sector accelerated again in June.
The Indonesian Manufacturing PMI in June 2023 was able to surpass the ASEAN Manufacturing PMI (51.0), Malaysia (47.7), Myanmar (50.4), the Philippines (50.9), Taiwan (44.8), Vietnam (46, 2), Japan (49.8), China (50.5), South Korea (47.8), United Kingdom (46.2), and France (45.5).
"The increase in Indonesia's Manufacturing PMI in June was in line with the increase in the Industrial Confidence Index (IKI) which we previously released, that the IKI in June 2023 reached 53.93 or an increase of 3.03 points compared to May 2023. This figure is also the highest since IKI was released last November 2022," said Agus.
Referring to United Union Statistics Economics data, Indonesia is included in the list of the top 10 manufacturing countries based on their percentage contribution to global manufacturing output. Apart from Indonesia, there are other developed countries such as China, the United States, Japan, Germany, India and South Korea.
In accordance with President Joko Widodo (Jokowi) directives, industrial downstreaming is also the government's focus. Downstreaming is the process of increasing the added value of a commodity by processing or refining raw materials into semi-finished goods or finished products. The selling value of products that undergo downstream processing will be higher than those sold in the form of raw materials.
"We are focused on implementing downstream industrial policies in three sectors, namely agro-based industries, mining and mineral-based materials, as well as oil and gas and coal-based. Gradually, the government continues to stop exports of raw mining materials including bauxite, tin and alumina," he concluded .
